Written by Kianna Best on Jan 11, 2023. Posted in Incentive News

New California budget extends state’s Film and TV Tax Credit

On Monday 10 January, Californian Governor Gavin Newsom announced a new state budget that will see the Film and TV Tax Credit programme extended for another five years, as well as making credits refundable for the first time since its 2009 launch. This new programme is an active stance against maintaining California’s status as the world’s media production capital, and preventing anymore “runaway productions”.

Image courtesy of Gabe by Unsplash

“The proposed budget affirms Governor Newsom’s leadership in ensuring California’s Film and TV Tax Credit Program evolves and continues to deliver on our goal of retaining and growing in-state production,” said California Film Commission Executive Director Colleen Bell. “The five-year extension and provision to make tax credits refundable will give industry decision makers more options and the certainty they need to make long-term investments here in the Golden State. This will translate into more production-related jobs, spending and opportunity.”

California’s performance in the film and television world has been longstanding, with the numbers to back up its status as a go-to destination for production. The California Film Commission’s latest progress report saw the latest version of the tax credit programme, which launched in July 2020, set for a total USD 6.2 billion statewide production spend generation during just the first half of its lifespan. Of this total USD 4.2 billion was qualified spending, which went to wages for below the line crew members. Although the new programme is stated to still provide USD 330 million in funding, the newest element of credit refundability will allow the programme to be applicable to a wider range of applicants. It will also allow applicants to collect a tax refund at a discount across many years.

After launching in 2009, the 2.0 verison of the programme saw a giant leap in funding from USD 100 million to the staggering value now of USD 330 million. A recent study by the Los Angeles Economic Development corporation (LAEDC) saw that for every dollars allocated by the California Film and TV Tax Credit Programme, USD 2.40 was contributed to economic output, with an additional USD 1.07 returned to tax payers and local tax revenues.

Image courtesy of Chris Murray by Unsplash

Beyond bringing in productions and increasing spending across the region, the tax credit also promotes training in the workforce, diversity and inclusion. As apart of the programme, participants are expected to participate in career readiness, a commitment to providing learning and training programmes such as paid internships for students and externships for faculty members. Funded directly by tax credit projects, the most recent training initative to be launched is the Career Pathways Programme. Targeting individuals from underserved communities. The initiative partners with other training programmes across the state to reduce any barriers, whether they be social, economic or geographic.