Federal Incentive Aims to Level the Playing Field
Lawmakers unveiled federal legislation to establish a 20%-30% U.S. film incentive, seeking to secure American dominance in entertainment production. This incentive stacks on top of state tax credits, creating the world's most generous subsidies for film and TV. Joe Chianese, senior vice president for incentives at Entertainment Partners, emphasized that if the bill is passed and implemented effectively, shooting in Georgia, California, or New York would be the most advantageous option globally, surpassing any overseas locations.[S1]
The legislation is the culmination of a two-year collaborative effort between Hollywood unions and the Motion Picture Association, which represents the major studios. It aims to address a historic production slump that has resulted in the loss of more than 50,000 jobs in Los Angeles alone over the past four years. This situation has prompted calls for action to counter the generous subsidies offered by the U.K., Canada, and 63 other countries. President Trump endorsed the effort last month, urging Congress to take immediate action to save the industry.[S1]
Credit Structure and Uplifts
Under the proposal, a 20% baseline credit would cover every category of labor spending, from below-the-line crew to above-the-line talent. Additional 5% uplifts are built in for shoots located in rural communities and for independent projects, which could push the total benefit as high as 30% of labor costs. Because Los Angeles County sits in a federally designated disaster area, it too would qualify for a 5% add-on over the coming five years.[S1]
Rep. Nathaniel Moran, a Texas Republican and one of the bill's sponsors, said the measure is meant to even the odds and ensure that American stories continue to be made on American soil. He framed the effort as backing U.S. workers, production by production. According to an MPA study, enacting a federal incentive could expand the country's $20 billion film and television sector twofold by 2032 while generating roughly 143,500 positions.[S1]
Support, State Incentives, and Global Competition
Sen. Tim Scott (R-S.C.) highlighted the importance of preventing American film production from moving overseas, as it would take away jobs, investment, and a significant source of American cultural influence. He believes the legislation will create jobs across America, support local economies, and ensure that iconic American films continue to be made in the country. Sen. Adam Schiff (D-Calif.) has long advocated for a federal incentive to stop the outflow of jobs overseas, and he sees this as a golden opportunity to achieve that goal.[S1]
Several states already offer tax incentives of 30% or higher. California is debating whether to increase its state incentive, which is currently 35%-45% but capped at $750 million annually. Manitoba boasts one of the world's most generous incentives, offering a credit on below-the-line labor that can reach 65%. Lynne Skromeda, Manitoba's film commissioner, acknowledges the potential impact of a U.S. credit on production in the province but believes Manitoba's competitive advantage will remain due to the currency exchange rate. Chianese suggests that other countries, particularly the U.K. and Canada, may respond to a U.S. film incentive to protect their own industries.[S1]
