Motion Picture Association<\/a> and the Hollywood unions, is pushing for a carve-out that would exempt film credits from the new limitation.<\/p>\n\n\tIn May, Newsom vowed to make companies \u201cpay their fair share\u201d by permanently limiting tax credits to 50% of a company\u2019s liability or $5 million, whichever is greater. The proposal was designed to help stabilize the state budget and eliminate a structural deficit through July 2028, while also protecting smaller businesses with lower tax liability.<\/p>\n
\n\tThe film credit is one of several state tax incentives. Among the others is the research and development credit, which costs the state roughly $1.5 billion to $2 billion a year, and the low-income housing credit, which costs about $388 million.<\/p>\n
\n\tNewsom\u2019s proposal would prevent companies from using those credits to wipe away all or most of their tax liability. But the entertainment industry groups argue that making it more difficult for companies to monetize their film credits will make them more reluctant to film in California.<\/p>\n
\n\t\u201cProducers make location decisions based on whether and when they can reliably realize the full value of available incentives,\u201d the letter advises.<\/p>\n
\n\tThe latest version of the budget, now working its way through the Legislature, would set a flat $5 million limit on credit utilization for the next three years. Starting in 2030, it would set a permanent credit limit of no more than 70% of a company\u2019s tax liability.<\/p>\n
\n\tIn a statement, the state\u2019s Department of Finance called the 70% limit \u201can appropriate middle ground that preserves the incentive effect of the state\u2019s business tax credits while ensuring a reasonable minimum tax is paid.\u201d<\/p>\n
\n\tThe department also said that the proposal will also have \u201ca limited impact on the film tax credit program,\u201d noting that companies can still use credits to offset sales tax and can still redeem any refundable credits over five years at a 10% discount.<\/p>\n
\n\tBut the industry groups are still arguing that film credits should be entirely exempt from the new limitations, as they have already been accounted for and approved by the Legislature through 2030.<\/p>\n
\n\tThe Independent Film and Television Alliance, which joined in the June 8 letter, argued that the proposal will affect indie producers as well as major studios.<\/p>\n
\n\t\u201cIndependent productions rely on the ability to monetize transferable tax credits as a critical component of their financing,\u201d said Jackie Brenneman, the group\u2019s president and CEO, in a statement. \u201cBy limiting how much of a credit any single buyer can apply in a year, the cap shrinks the pool of buyers able to absorb a full certificate and drives down what they will pay for it.\u201d<\/p>\n
\n\tNewsom and the Legislature made the film credit refundable in 2025. But some companies are still holding non-refundable film credits that were issued before then, and could not be claimed against tax liability due to previous state limits on credit utilization. The letter warns that those credits are now at risk of expiring, and argues that they should be made refundable or transferable.<\/p>\n<\/div>\n
\u2018 The preceding article may include information circulated by third parties \u2019 <\/em><\/p>\n \u2018 Some details of this article were extracted from the following source variety.com \u2019 <\/em><\/p>\n","protected":false},"excerpt":{"rendered":"The entertainment industry is warning Gov. Gavin Newsom that the state risks undermining California production if it imposes a new limit on corporate tax credits. In a June 8 letter, a coalition of industry and labor groups argued that the governor\u2019s budget proposal will cost production jobs and sabotage the state\u2019s film incentive. \u201cThe result […]<\/p>\n","protected":false},"author":2,"featured_media":2466344,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"jnews-multi-image_gallery":[],"jnews_single_post":[],"jnews_primary_category":[],"jnews_social_meta":[],"footnotes":""},"categories":[25172],"tags":[485187,374514],"class_list":["post-2466343","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-entertainment","tag-california-film-television-tax-credit","tag-motion-picture-association"],"jetpack_featured_media_url":"https:\/\/celebrity.land\/en\/wp-content\/uploads\/2026\/06\/Hollywood-Warns-California-Against-Sabotaging-Film-Incentives.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/celebrity.land\/en\/wp-json\/wp\/v2\/posts\/2466343","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/celebrity.land\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/celebrity.land\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/celebrity.land\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/celebrity.land\/en\/wp-json\/wp\/v2\/comments?post=2466343"}],"version-history":[{"count":1,"href":"https:\/\/celebrity.land\/en\/wp-json\/wp\/v2\/posts\/2466343\/revisions"}],"predecessor-version":[{"id":2466345,"href":"https:\/\/celebrity.land\/en\/wp-json\/wp\/v2\/posts\/2466343\/revisions\/2466345"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/celebrity.land\/en\/wp-json\/wp\/v2\/media\/2466344"}],"wp:attachment":[{"href":"https:\/\/celebrity.land\/en\/wp-json\/wp\/v2\/media?parent=2466343"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/celebrity.land\/en\/wp-json\/wp\/v2\/categories?post=2466343"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/celebrity.land\/en\/wp-json\/wp\/v2\/tags?post=2466343"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}