California Gov. Gavin Newsom proposed increasing annual allocations for the state’s film and television tax-credit program to at least $1 billion, a bid to keep productions in California amid global competition.
Under the plan, above-the-line compensation would qualify as an eligible expense, subject to program caps. The proposal would reserve $100 million a year for independent productions, $26 million more than the current allocation for that group. Companies committing to at least two distinct qualifying productions in California would be eligible for a 5% credit increase.
Newsom’s office also proposed extending the program through 2040. California raised the program’s annual allocation from $330 million to $750 million in 2025. The California Department of Finance lists $750 million in allocations for each fiscal year from 2025-26 through 2029-30.
The California Department of Tax and Fee Administration (CDTFA) says credits for qualified productions may be used against state franchise or income tax liabilities, or applied to sales and use taxes.
The Nov. 2 announcement gave no fiscal estimate for the new proposal. For the earlier 2025 expansion, the governor’s budget materials estimated revenue reductions of $15 million in fiscal 2025-26 and $209 million in fiscal 2028-29, according to figures cited in an Assembly subcommittee agenda. Those estimates do not measure the cost of Newsom’s new plan.
Newsom also urged Congress to pass the Motion Picture, Television, and Entertainment Revitalization Act by the end of 2026. Senate bill S. 5552, introduced Sept. 24, proposes a 20% base credit that could rise to as much as 30% for productions meeting specified conditions. Its official record lists referral to the Senate Committee on Finance as the latest action, with no next action scheduled. Newsom’s announcement gave no legislative timetable for the state proposal.
