California lawmakers have agreed on a partial carveout for the film and TV industry from a state cap on tax credits.
The MPA and the Entertainment Union Coalition have signed on to the agreement. As Variety reported on Aug. 18, the deal falls short of their request for a complete exemption for film tax credits from the $5 million cap.
The agreement also fully exempts credits for independent film — which account for 10% of the $750 million program — from the cap.
“It meaningfully improves the situation,” said Kathleen Thompson, vice president of tax incentives at Cast & Crew, a production services company. “They threw a bone to both the studios and to independents.”
The deal also extends the expiration date of non-refundable tax credits issued prior to 2025 by up to five years. That provision is meant to help studios that are still sitting on millions of dollars of old, unused credits, and were at risk of having them expire after nine years.
The bill must be approved by both houses by midnight on Monday, and is expected to do so.
