California Legislature Proposes Increased Tax Credits for Film Industry
In a climate of tightening budgets, California Governor Gavin Newsom’s push to double state tax credits for Hollywood productions has sparked controversy. Two proposed bills, Assembly Bill 1138 and Senate Bill 630, aim to expand tax credits for film and television projects, potentially burdening taxpayers.
Currently, California offers credits of 20% or 25% for eligible projects, with funding allocations for notable films and series already underway. AB 1138, led by Assemblymember Rick Chavez Zbur, seeks to raise credits to between 35% and 40% and broaden eligibility to animated films and large-scale competition shows. The bill reportedly passed the Assembly Revenue and Taxation committee with minimal dissent.
Meanwhile, SB 630, authored by Senator Ben Allen, proposes to increase total tax credits from $330 million to a staggering $750 million annually, and has gained unanimous support in its committee.
Critics, including economic experts, argue that these credits benefit only the film industry, while ordinary citizens face higher taxes. Raymond Sfeir of Chapman University warns that union influence and state labor laws inflate production costs, further complicating the situation. As the state grapples with economic challenges, critics urge a reevaluation of these tax incentives.
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