The California Legislature has approved a budget fix for the entertainment industry that allows studios to cash in their tax credits faster.
Both the Assembly and state Senate passed the bill, SB 186, before the end-of-session deadline of midnight on Monday.
The measure seeks to address concerns raised by Hollywood stakeholders after the Legislature imposed a $5 million annual cap on corporate tax credits in June. The Motion Picture Association and the Entertainment Union Coalition argued that the cap would undercut the state’s $750 million incentive for film and TV production.
In response, legislative leaders and the governor’s office agreed to let studios to redeem tax credits for cash in two years instead of five. The deal falls short of a full carveout for the film industry, though it does fully exempt credits for independent films from the cap. It also extends the expiration date for old, non-refundable tax credits from nine years to up to 15 years.
Gov. Gavin Newsom is expected to sign the measure.
