Newsom proposes $1 billion cap for film and TV tax incentive

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Set us as preferred Gov.Gavin Newsom wants to expand California’s current Film and Television Tax Credit Program from $750 million to at least $1 billion annually.The proposal would include credits for above-the-line talent and extend the tax credit through 2040, according to a press release Monday.

If passed, the credit would be the country’s largest capped film and TV tax credit.“We’re the capital of entertainment and we’re going to keep it here,” Newsom said in a statement.“Through this expansion, we will maintain the momentum and success of our historic expansion last year.”Newsom expanded the program last year, when the annual credit was raised from $330 million to $750 million through 2030.

In its first year post-expansion, the credit generated more than $8 billion in direct production spending, over 43,000 jobs were created and film shoot days rose 52% year-over-year, according to the governor’s office.Hollywood Inc.

Gov.Gavin Newsom signed AB 2319, California’s first standalone post-production tax credit, offering 35% to 50% back to lure editing, sound and VFX work home.But as other states and countries offer more competitive incentives, many major productions have continued to leave California.

Those more attractive film and tax incentives typically include above-the-line costs like actors’ salaries and are often uncapped — California’s current program does not have these features.Despite the bolstered tax incentives, local film and TV production in the Los Angeles area continues on a downward trend.FilmLA, the nonprofit group that handles film permits for the region, recently reported shoot days between July and September were down 4.8% from the same period last year and nearly 29% below the five-year average.By expanding the program again, Newsom said he wants to address some of Califor...