California lawmakers enacted the bill originally proposed by Governor Gavin Newsom. This more than doubled the annual allocation of the tax credit program to $750 million.
The increase from $330 million came into effect on July 1st, meaning California is currently offering the third-highest incentive package behind New York and Georgia.
Industry groups and activists have fought for a series of enhanced incentives in light of the decline in attractive products and local film and television shoots from around the US and elsewhere around the world as Hollywood was cut off in 2023.
Rebecca Line, Western Executive Director of the American Director Guild and chairman of the Entertainment Union Union, welcomed the developments on Friday and the “court leadership by Governor Newsom,” adding that its members’ activities are “the core driving force behind maintaining and reviving good industrial jobs for our nation.”
The Line continued: “We are calling on the studio to recommend it to the communities and workers in the state who have built the industry and built the company.”
The measure was approved as part of a “trailer bill,” which was added to the state’s 2025-2026 budget, passed earlier this week. The increase in quota will come into effect on July 1, along with version 4.0 of the California Film & Television Tax Credit Program.
Next week, the California Legislature will vote for a program change in another bill (AB 1138) that proposes raising the tax credits for individual projects from 20% to 35%, suggesting expanding eligible projects to include animation features, shorter television shows and some scripted television. The deadline for the measures to be approved is July 7th.
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