California Extends Film and TV Tax Credit, New Jersey Expands
California Gov. Gavin Newsom signed a bill on Monday that extends the state’s $330 million tax incentive for film and TV production.
The program will be extended for five years through 2030. For the first time, the credit will be refundable, meaning that companies like Netflix that have little or no state tax liability can receive cash back from the state. That change has been estimated to cost $200 million.
The bill is the result of more than a year of bargaining between Hollywood studios, entertainment unions and state lawmakers. In addition to extending the credit, the bill also includes an incentive for productions to hire a diverse workforce, both on screen and behind the camera.
The law also establishes gun safety requirements for all productions in the state, in response to the “Rust” shooting that occurred on the New Mexico set in 2021.
The move comes four days after New Jersey Gov. Phil Murphy signed a bill that significantly expands that state’s incentive for production infrastructure. The bill is designed in large measure to help Netflix build a new production facility at Fort Monmouth, a decommissioned Army base.
Netflix announced plans to acquire 300 acres at the site last year, along with investing $850 million to transform it into a studio with 12 stages. Lionsgate is also eyeing a new studio facility in Newark, which could also benefit from the expanded incentive.
Under the legislation, the cap on New Jersey’s incentive for studio construction will increase from $350 million a year to $400 million. The incentive for production companies that lease space at New Jersey studios will also increase from $100 million to $250 million a year.
Earlier this year, New York expanded its film tax incentive from $420 million annually to $700 million. Texas, where budgets cover two years, increased its film incentive from $45 million to $200 million.
The Nevada Legislature, meanwhile, did not approve a bill to provide up to $190 million a year in incentives to film and TV projects — the vast majority of which would have been used to incentivize two studio projects in Las Vegas.
Source: Variety
