{"id":5313,"date":"2026-08-14T23:38:07","date_gmt":"2026-08-14T23:38:07","guid":{"rendered":"https:\/\/uspropertymoves.com\/?p=5313"},"modified":"2026-08-14T23:38:07","modified_gmt":"2026-08-14T23:38:07","slug":"california-pledged-750-million-a-year-to-hollywood-but-a-new-law-has-a-big-catch","status":"publish","type":"post","link":"https:\/\/uspropertymoves.com\/?p=5313","title":{"rendered":"California Pledged $750 Million a Year to Hollywood. But a New Law Has a Big Catch"},"content":{"rendered":"
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\n\tThe entertainment industry in California won a crucial lifeline when Gov. Gavin Newsom signed a $420 million boost to the state\u2019s film and TV tax incentives program into law in 2025.<\/p>\n

Read more Ian Crafford, Film Editor on \u2018Hope and Glory\u2019 and \u2018Field of Dreams,\u2019 Dies at 82<\/a><\/p>\n

\n\tNow, stakeholders claim that win is in jeopardy thanks to language in a recent state budget bill that was signed into law on June 29. And they\u2019re racing to pass a solution by the end of the legislative session.<\/p>\n

\n\t\u201cBudget bill SB 122 puts our program at risk by retroactively changing the rules and threatening the recovery efforts of our already fragile industry throughout California,\u201d reads one letter that entertainment unions are encouraging their members to send to legislators. \u201cChanging the rules after the fact creates uncertainty and instability, further disrupting our struggling industry.\u201d<\/p>\n

\n\tThe letter calls for the legislature to exempt the entertainment industry from the bill in question, SB 122. So far, around 350,000 such messages have been sent to legislators from union members, a spokesperson for the Entertainment Union Coalition tell The Hollywood Reporter<\/em>.<\/p>\n

\n\tSB 122 extends temporary caps on the use of business tax credits over $5 million in a given tax year and, starting in 2030, enshrines a permanent tax credit cap of 70 percent of a taxpayer\u2019s liability or $5 million, whichever is greater. Practically speaking, that means that if a major studio has earned tens of millions in tax credits in a single year by locating their productions in the state, it could take years to realize the full value of those credits.<\/p>\n

\n\tFor instance Paramount nabbed $37.7 million in tax credits, including for Viola Davis thriller Ascent<\/em> and a sequel series to the film Clueless<\/em>, from the California Film Commission in its latest round of incentives. As the studio puts these projects into production, however, it will need to keep in mind that for now SB 122 is capping the amount of credits it can get back in a year to $5 million, with rules slightly modified starting in 2030. Same scenario for Disney, which received $45 million from California to shoot a big as-of-now untitled detective series in the state. Disney can only get back a fraction of the tax credits it earns in California annually.<\/p>\n

\n\tCritics say this slow payout process will diminish the value of California\u2019s film and television tax credit program which, along with the uncertainty created by this sudden change in policy, could persuade skittish productions to take their business elsewhere.<\/p>\n

\n\tLegislators including State Assemblymember Rick Chavez Zbur and Senator Ben Allen \u2014 who both carried bills realizing 2025\u2019s tax credit boost \u2014 are working on finding a legislative solution. \u201cI am confident that we all can work together to make some changes to SB 122 that continues to allow the film tax credit program to achieve its goals, which is to preserve and grow the film and television industry in California,\u201d Zbur said in an interview.<\/em><\/p>\n

Read more Recording Academy Considers Revamping New Asian Pop Category After BTS Pulls From Grammy Voting<\/a><\/p>\n

\n\tSources tell THR<\/em> that entertainment organizations were blindsided by finding themselves exposed to the tax credit cap. Some were allegedly told that the industry would be carved out from the bill, only to later learn that they weren\u2019t.<\/p>\n

\n\tTo Zbur, it was a matter of simple confusion. \u201cWhen we were voting on SB 122, I think there was confusion about the details of it. I think members believed that the film and TV tax credit was exempt from the program,\u201d he said. \u201cAs it turns out, the exemption that was in the bill was an exemption only to the refundability aspects of the program, which basically meant that the program was not exempt in the end.\u201d<\/p>\n

\n\tSince the $750 million tax credit was signed into law last year, Los Angeles hasn\u2019t yet experienced a significant recovery in production levels. Still, advocates believe they may soon see a turnaround as projects that earned credits \u2014 like the nine TV shows recently awarded $145.5 million to film in California \u2014 get going. The budget trailer bill, they claim, will dampen a return to form that has barely gotten started.<\/p>\n

\n\t\u201cAmending SB 122 is essential to helping to ensure that the next production happens in California rather than in the\u00a0United\u00a0Kingdom, Australia,\u00a0Georgia, Vancouver\u00a0or Saudi Arabia,\u201d Brigitta Romanov, the president of the California IATSE Council, said in a statement to The Hollywood Reporter<\/em>. \u201cFor IATSE members, this legislation is about helping to ensure the entertainment industry continues to fuel jobs that feed families and our state\u2019s economy.\u201d<\/p>\n

\n\tAlso threatening momentum for production in California is the Paramount-Skydance Warner Bros. megamerger hanging in the balance. Amid legal fights over the legality of the deal, Paramount Skydance CEO David Ellison has threatened to move one or, if he succeeds in merging the companies, two studios out of California if the parties don\u2019t come to a settlement by Oct. 1. The relocation threat may be an unrealistic bargaining tactic, but it\u2019s not calming any nerves about production levels in California.<\/p>\n

\n\tWithin this delicate environment, the fight against SB 122 has become a last-minute scramble, with advocates trying to get an amendment in motion before the legislative session adjourns on August 31. Some kind of solution to resolve industry concerns is expected to be proposed within the next week.\u00a0<\/p>\n

\n\t\u201cOur success in last year\u2019s fight was a direct reflection of the engagement and voices of our members,\u201d at least a couple of entertainment unions have said in messages to members, referencing the 2025 tax credit increase. \u201cWe are now asking our members to once again use their voice to raise the concerns about our fragile industry and call for an\u00a0urgent solution.\u201d<\/p>\n

Read more Kathie Hoops, Longtime Financial Executive at Paramount, Dies at 66<\/a><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Hollywood organizations claim a new budget law will jeopardize the momentum of productions returning to California. Legislators are working on it.<\/p>\n","protected":false},"author":1,"featured_media":5312,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[3032,556,429],"class_list":["post-5313","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-interesting","tag-iatse","tag-labor","tag-production-news"],"yoast_head":"\nCalifornia Pledged $750 Million a Year to Hollywood. 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