California Film Credit: Newsom Seeks $1B Boost

California Gov. Gavin Newsom proposed expanding the state's Film and TV Tax Credit Program to at least $1 billion on Monday, November 2.

The announcement came one day before the 2026 midterm elections. The current program offers $750 million in annual tax credits. Newsom's office describes this as the largest capped film and TV tax credit in the United States. The proposed expansion would increase funding to over $1 billion per year.

The new structure includes specific changes to how credits are allocated. Credits would extend to above-the-line talent, covering actor salaries, subject to funding caps. The plan earmarks $100 million annually for independent productions, a $26 million increase from the current level. Companies that commit to at least two distinct qualifying productions in California would receive a 5% boost in their tax credits. The program's sunset date would extend from five years to ten, running through 2040.

Newsom also urged Congress to pass the federal Motion Picture, Television, and Entertainment Revitalization Act, known as MPTERA, by the end of 2026. This bipartisan legislation would establish a 20% base tax credit for qualifying film, television, and VFX projects produced in the U.S.

The proposal follows a previous increase that raised the state credit from $330 million to $750 million last year. Production levels in California have continued to fall despite that earlier expansion. The governor's office states the current program has generated $8.24 billion in direct production spending to date. This figure includes $5.3 billion in qualified expenditures and $3.2 billion in qualified wages for more than 43,000 cast and crew jobs.

In announcing the program, Newsom stated, “California created the modern entertainment industry; we’re the capital of entertainment and we’re going to keep it here. At least $1 billion in tax credits means more investment flowing into our economy and more opportunity across the industry.” He added, “But states can’t shoulder the cost alone, which is why I am calling on Congress to back up an expanded tax credit by passing national film and TV tax credit legislation already on the table.”

The next step involves legislative action in Sacramento to adjust state budgets and in Washington to finalize the federal bill. The state credit is currently set to expire in five years without this extension.