SB 186 would exempt indie projects from business tax credit caps and allow film and TV production to monetize their refunds faster.
The California state legislature has passed a bill intended to mitigate the impact of business tax credit caps on the state’s $750 million annual film and television incentives program.
Legislators voted to pass SB 186, carried by state Sen. Ben Allen, on Monday night. The legislation is now in the court of Gov. Gavin Newsom, who will decide to sign the bill into law or veto it by the end of September.
The bill, introduced at the last minute on Friday from Allen, with a companion bill from Assemblymember Rick Chavez Zbur introduced in the Assembly, addresses the fallout from a state budget bill, called SB 122, that alarmed Hollywood production advocates when it was signed into law earlier in the summer.
SB 186 exempts indie productions from annual caps on the use of business tax credits that are rendered permanent as a result of the 2026 state budget legislation. The legislation also sweetens conditions for productions that choose to monetize a portion of their tax credits instead of putting the full value toward their tax liability. The bill allows production to monetize 95 percent of their credits, where previously they could monetize 90 percent.
