California Extends State Film Tax Credit Program to 2025

June 30, 2018

On Wednesday, California Gov. Jerry Brown signed legislation to extend the state’s tax credit program to 2025. The bill is recognized as a major win for the local film and television production industries. The incentives were set to expire in 2020, but will now continue for an additional five years. 

In line with the program currently in place, Brown’s $201.4-billion budget will maintain the $330 million in annual tax credits provided to eligible productions each year. However, the bill includes more relief for independent films, promotes diversity in the industry, strengthens sexual harassment policies, and provides additional incentives for hiring locally based crew members when productions film outside the Los Angeles 30-mile zone.

California’s film and television production tax credit program commenced in 2009 and subsequently was amended in 2014 to increase the amount allowed for TV and film productions. The credits have been praised as highly successful in creating and sustaining jobs in the industry–especially in response to the trend of runaway productions moving to states like Georgia, New Mexico, Michigan, Louisiana, and New York as well as other countries such as Canada and London. With Georgia offering $600 million in 2016, and New York offering $420 million a year, many productions left California in the dust. However, once California stepped up with tax incentives–albeit, late in the game–the state indeed was able to entice several series to return to the Golden State.

VICA President Stuart Waldman supported the bill in hopes of keeping production in the state competitive. “This extension will maintain and support economic vitality brought to California and to the greater San Fernando Valley region by film and television projects.”

Other supporters of the bill include Warner Bros. Entertainment in Burbank, Valley Industry & Commerce Association in Van Nuys, the nonprofit FilmL.A. in Los Angeles, and Teamsters Local 399 in North Hollywood.

The Entertainment Union Coalition stated that over 45,000 of its working California members have been employed or re-employed, and below-the-line workers received $2.3 billion in wages. The coalition consists of the Directors Guild of America, California IATSE Council, SAG-AFTRA, and the International Brotherhood of Teamsters Local 399, and LiUNA Local 724. The coalition stated, “As productions continue to shoot in California, our members now know they can earn a living and stay with their families–well into the future.”

The program starts with a competitive application process and takes several filmmaking aspects into consideration including job creation and wages. The California Film Commission selects productions that receive the incentives. The commission’s tax-credit program director Nancy Rae Stone applauded the extension, stating, “The new five-year extension signed into law today provides assurance that California will remain competitive, which means more employment for in-state crew members and production spending here at home where it belongs.”

Likewise, the president of FilmL.A. said, “The renewal of the tax credit will allow us to sustain the high level of filming taking place in California, and keep tens of thousands of middle-class Americans gainfully employed. California recognizes the need to be competitive in the world of filmmaking and we are grateful for the continued support.” FilmL.A. oversees film permitting over the greater Los Angeles region.

Selected filmmakers can receive up to 25-percent compensation up to the first $100 million which can be applied to an assortment of qualified costs including crew salaries and set construction. However, excessive costs like the salaries of movie stars do not qualify.

While the majority of big-budget studio movies continue to film outside of California, some major Hollywood film productions have chosen to set up camp in the Golden State–among them are Sony’s Once Upon a Time in Hollywood directed by Quentin Tarantino, Disney’s Captain Marvel, and Paramount’s Bumblebee.

Several types of productions were not included in the tax credit program, including commercials.  If you’d like to let the governor’s office know how thousands of California citizens and companies could benefit by extending this type of tax relief to the commercial industry, you can write them here.