Lawmakers in Sacramento introduced a budget fix on Thursday that helps film producers by adjusting a state cap on tax credits.
The agreement, first reported by Variety on Tuesday, falls short of a full carveout for film and TV tax credits from a blanket $5 million annual cap, which industry leaders have been seeking since June.
But the deal does fully exempt tax credits for independent films, while accelerating the payback period for tax credits for major studio projects.
The Motion Picture Association supports the measure, as does the Producers Guild of America and the Entertainment Union Coalition. The bill is authored by Assemblyman Rick Chavez Zbur and Sen. Ben Allen, two of the industry’s strongest supporters in the California Legislature.
A summary of the bill, SB 1229, states that it will “mitigate some of the impacts” of the $5 million cap on tax credits, which was approved as part of the state budget in June. Industry unions had protested that the cap would undercut the state’s incentive for film production, which was expanded to $750 million last year, by preventing studios from claiming the full amount of their credits.
