Wed, Aug 3, 2022 3:02 PM
By Madison Hirneisen, The Center Square
Gov. Gavin Newsom is throwing his support behind a bill moving through the state legislature that would spend $1.65 billion to expand California’s film and TV tax credit through 2030.
If passed, Senate Bill 485 would expand the film and TV tax credit for an additional five years, providing $330 million per year in tax credits for filmmakers. The current film and television tax credit program is financed through 2025.
Newsom’s endorsement comes as the governor has made strides in the past to paint the Golden State as a beacon for abortion rights after several states imposed new abortion restrictions following the U.S. Supreme Court’s decision to overturn Roe. v. Wade in June. On Wednesday, Newsom ran an ad in Hollywood urging the film industry to continue to film in California as opposed to states like Georgia and Oklahoma, who “have waged a cruel assault on essential rights.”
“As other states roll back people’s rights, California will continue to protect fundamental freedoms for all and welcome businesses that stand up for their employees,” said Governor Newsom. “Extending this program will help ensure California’s world-renowned entertainment industry continues to drive economic growth with good jobs and a diverse, inclusive workforce.”
The state’s film and television tax credit had existed since 2009 when the state introduced a five-year program to provide $100 million in tax credits annually. The allocation was increased to $330 million per year in 2015, and the most recent five-year iteration of the program launched in July 2020.
Independent films, feature films, new TV series, mini-series and pilots can apply for a tax credit that ranges from 20-25% so long as they have a $1 million minimum budget and are produced in California. For independent films, the tax credit applies to only the first $10 million of qualified expenditures, while the credit applies to the first $100 million in qualified expenditures for feature films.
The state also offers a tax credit of up to 25% for TV series that filmed its most recent season outside of California and relocates to the state. The series must have a $1 million minimum budget per episode, and the credit reduces to 20% after the first season is filmed in California.
Films including “A Star is Born” and “Top Gun: Maverick” qualified as approved projects in Program 2.0, as well as TV series including “Euphoria” and “This is Us.”
“A Star is Born” grossed $436.2 million worldwide and was approved for over $7 million in reserved credits, while “Top Gun: Maverick” has topped $1.3 billion worldwide and was approved for over $21 million in reserved credits.
Supporters of the legislation to expand the tax credit say it is an important tool to bring jobs to the state and keep film production in California. Since launching in 2009, 604 projects have been approved for tax credits, and $2.5 billion in credits have been allocated, according to the California Film Commission.
Backers of the bill also tout the economic benefits of the program. A study by the Los Angeles Economic Development Corporation released in March estimated that, for every tax credit dollar allocated, the state saw $24 in economic output.
“The Governor’s actions today speak to the values held by so many people across the film and TV production industry,” California Film Commission Executive Director Colleen Bell said in a statement Wednesday. “More than ever, California offers the best value and the best values.”
The bill is currently working its way through the state legislature and was heard in the Assembly Appropriations Committee on Wednesday.