California Gov. Gavin Newsom has proposed increasing the state's film and television tax credits to at least $1 billion annually, a move aimed at retaining Hollywood productions within the state. The proposed expansion includes new incentives for covering the salaries of movie stars and extends the program through 2040.
This latest proposal builds upon the $750 million annual program Newsom secured the previous year. The expanded credits would allow qualifying productions to claim tax benefits for above-the-line compensation, such as pay for actors, directors, writers, and producers, though these benefits would be subject to caps. "California created the modern entertainment industry; we're the capital of entertainment and we're going to keep it here," Newsom stated.
The governor indicated that the proposal is intended to "maintain the momentum" from last year's tax credit expansion and reiterated his call for federal action, stating, "states can't shoulder the cost alone."
A report released in August by Los Angeles County indicated that California had lost 52,016 film and television jobs since 2022, with the majority of these losses occurring in Los Angeles County. Concerns about Hollywood potentially becoming "the next Detroit" intensified in the spring of 2025, as on-location production in the Los Angeles area decreased by 22.4% in the first quarter compared to the previous year.
According to a state Assembly analysis, California's share of U.S. post-production employment has fallen from approximately 53% to 42% between 2005 and 2025. This sector previously employed over 12,000 workers statewide.
In response to these trends, Newsom signed legislation in September that established California's first standalone post-production tax credit. This initiative offers producers credits ranging from 35% to 50% of qualifying in-state spending on editing, sound, music, visual effects, and finishing, even for projects filmed elsewhere.
The governor's latest proposal also earmarks $100 million annually for independent films, an increase from the previous $74 million, and includes a 5% credit boost for companies that commit to at least two qualifying California productions. Newsom's office claims that its current efforts have resulted in $8.25 billion in direct production spending and supported over 43,000 cast and crew jobs.
Several entertainment figures have publicly supported California's incentive programs. Comedian Will Ferrell expressed gratitude for tax credits supporting his film "Self Help," and Snoop Dogg thanked Newsom and the California Film Commission for backing his biopic. Jimmy Kimmel also noted the benefits for his series "SCHOOLED!" and Ben Affleck cited tax credits for supporting films like "Argo," "Unstoppable," "The Accountant 2," and his upcoming movie "Gingerbread Men."