Hollywood Boost! Lawmakers Push New 20-30% U.S. Film Incentive to Reignite Production

A bipartisan group of lawmakers has unveiled federal legislation aimed at establishing a 20%-30% U.S. film incentive, a move designed to cement American dominance in entertainment production. This proposed incentive would significantly bolster existing state tax credits, creating what proponents describe as the most generous subsidies globally for film and television production. Joe Chianese, senior vice president for incentives at Entertainment Partners, emphasized that if the legislation passes and stacks cleanly, filming in states like Georgia, California, or New York would offer an unparalleled financial advantage over any overseas location.

The legislation is the culmination of a two-year collaborative effort involving Hollywood unions and the Motion Picture Association (MPA), which advocates for major studios. This initiative comes in response to a historic slump in production that has led to the loss of over 50,000 jobs in Los Angeles alone in the past four years. The industry has been actively seeking ways to counter the attractive subsidies offered by countries such as the U.K., Canada, and 63 other nations. President Trump recently endorsed the effort, urging Congress to swiftly craft legislation to safeguard the industry.

The core of the incentive involves a 20% base credit applicable to all labor costs, encompassing both below-the-line and above-the-line personnel. Additional "uplifts" would grant 5% bonuses for productions filmed in rural areas or for independent projects, potentially increasing the total credit to a maximum of 30% of labor costs. Furthermore, Los Angeles County would qualify for a 5% bonus for the next five years, recognized as a federal disaster area due to last year's fires. This provision for Los Angeles County is valid through January 2030. The bill is comprehensive, covering a wide array of productions including animation and reality shows, and explicitly includes salaries for actors and other above-the-line talent. A separate credit for visual effects and post-production would also apply to projects filmed internationally but completed within the U.S.

Rep. Nathaniel Moran (R-Texas), one of the bill's sponsors, articulated the legislation's purpose: "If we want to keep American storytelling in America, we have to level the playing field, and that’s exactly what this bill does. This isn’t about subsidizing Hollywood — it’s about supporting the American worker, one story and one production at a time." An MPA study released last week projects that a federal incentive could double the nation’s $20 billion film and TV production industry by 2032 and generate approximately 143,500 jobs. Sen. Tim Scott (R-S.C.) underscored the urgency, stating, "We cannot stand by as more and more American film production moves overseas, taking jobs, investment, and an important source of American cultural influence with it. This legislation will create jobs in communities across America, support local economies, and help ensure that the next generation of iconic American films is made right here in America." Sen. Adam Schiff (D-Calif.) highlighted this as the best opportunity in decades to secure a federal incentive to prevent job exodus.

Supporters are now pushing intensely to pass the legislation by the end of the year, aiming to capitalize on current momentum before potential changes in congressional control next term. Lawmakers anticipate that the federal film incentive could be incorporated into a significant tax bill during the lame-duck session. Rep. Linda Sanchez (D-Calif.) emphasized the need to "strike while the iron is hot." Moran confirmed the goal is realistic, citing bicameral, bipartisan support and presidential backing. Rep. Laura Friedman (D-Calif.) added that film is unique in its ability to quickly generate numerous jobs. The proposed credit is designed to stack on state-based incentives without reducing qualified spend due to state credits, potentially pushing total subsidies into the 50% range in several states, making the U.S. highly competitive.

Despite the strong push, some uncertainties remain. Lynne Skromeda, Manitoba’s film commissioner, expressed caution regarding the exact impact on production in her province, noting that the "devil is in the details" and that Manitoba might still maintain an advantage due to currency exchange rates. Chianese also speculated about potential responses from other countries, such as the U.K. and Canada, which would likely take measures to protect their own industries. The bill currently lacks a cost estimate, and Moran indicated that its final form might evolve during negotiations as feedback is received and "pay-fors" are identified to offset associated costs.