Hollywood would get 20% federal film tax credit under proposed new bill

A bipartisan group of Congressional leaders officially introduced a bill to create a federal film and television tax credit, a long-sought goal for many in Hollywood who say it’s necessary to help bring production back to the U.S.

The bill, known as the Motion Picture, Television and Entertainment Revitalization Act, would establish a 20% tax credit on U.S. labor for film and TV productions, including post-production and visual effects work.

That credit could increase to 30% with several uplifts, including 5% bonus credits for independent productions or those that film at least 30% of principal photography days in a rural qualified opportunity zone or a federally declared disaster area.

Productions that film at least half of their days and spend at least $10 million in qualified compensation in 10 or more states also could qualify for an additional uplift.

Feature films, TV shows or TV pilots could qualify for the tax credit if their total cost is more than $1 million and 75% of the principal filming days occur in the U.S., according to the bill. Live sports, daytime dramas, talk shows, news, social media content and advertising and corporate videos would not be eligible.

The effort is being led on the House side by Reps. Nathaniel Moran (R-Texas), Linda Sánchez (D-Whittier), Brian Jack (R-Ga.) and Laura Friedman (D-Glendale), and on the Senate side by Sens. Tim Scott (R-S.C.) and Adam Schiff (D-Calif).

“For years, I’ve been championing a federal film tax credit to stop the exodus of TV and film production leaving the United States for countries offering higher incentives,” Schiff said in a statement Thursday. “Now, we have the best opportunity in decades to get it done.”

A group of lawmakers, industry groups and Hollywood unions have been quietly working behind the scenes for more than a year to build momentum for a federal film tax credit.

The effort got a major boost last month when President Trump signaled his support after meeting with actor Jon Voight, who he has appointed as one of his Hollywood ambassadors.

Supporters point to the increasing number of productions that have left the U.S., lured by more extensive incentives offered by other countries, including the United Kingdom, Ireland and Canada.

At least 65 nations offer film and TV tax credits, according to a recent study commissioned by the Motion Picture Assn. trade group, which is backing a U.S. federal incentive. The study said a federal film tax credit could increase U.S. production spending by $125 billion and add more than 143,000 jobs by 2035.

It’s not clear, however, how much of that spending would flow back to California — which has been especially hard hit by the exodus of production — since dozens of other states including New York, New Jersey and Georgia also compete for Hollywood’s business and have established film crews and studios.

But stacking a federal tax credit on top of the newly bolstered California production incentives could help give the state an edge when producers are pricing out location shoots, industry experts say.

“For over a year, I’ve worked to build a coalition of unions, studios, Republicans and Democrats, and the White House, because we knew that a national film tax credit would bring hundreds of thousands of jobs back to our country,” Friedman said in a statement. “This bill is a result of that coalition. It tells every country that has been outbidding us for American work that we are done losing.”