Hollywood Heads to Congress: The Push for a Federal Film Tax Credit
Hollywood is packing its bags for Washington. As of August 2026, industry leaders are holding regular meetings and preparing a lobbying push in Congress for a federal film production tax credit — a tax break that would sit on top of the incentives individual states already offer, giving productions a financial reason to shoot in the United States rather than abroad Variety.
The drive has been building for nearly two years, sparked by a dramatic downturn in domestic production that has hit Los Angeles the hardest. More than 50,000 jobs have disappeared from the LA area since 2022 Variety. Crews, soundstages, and the small businesses that feed them have felt the squeeze as productions increasingly head to Canada, Australia, the UK, and Europe, where governments offer more generous tax breaks to attract filming.
The Motion Picture Association — the trade body representing major studios and streamers — is preparing a report on the economic returns from film credits and has been meeting with the House Ways and Means Committee, the congressional panel that writes tax law Variety. MPA Chairman and CEO Charles Rivkin told the 2026 CinemaCon audience that the industry is "fighting daily" to reach the goal of a federal film tax incentive MPA.
The industry's core argument: state incentives are not enough. California's Film and Television Tax Credit 2.0 has generated nearly $21.9 billion in economic output over five years and supported more than 110,000 jobs, according to the MPA MPA. New York runs separate film production and post-production credit programmes. But states compete against each other as much as against foreign countries, and 11 US states have no production tax incentive at all. Vermont does not even have a film office. Wyoming eliminated its incentive in 2017 Variety.
The existing federal tool is narrow. Section 181 of the tax code allows an immediate deduction for the first $20 million of production costs on qualifying films and television shows — the only federal tax incentive specifically targeting US-made productions, according to the Directors Guild of America, which supports legislation to extend and strengthen it DGA. The One Big Beautiful Bill Act, passed by the 119th Congress, expanded that deduction to cover up to $150,000 of qualified production costs — a fraction of what a full feature or season of television actually costs to make Congress.gov.
What industry leaders want now is something bigger: a federal credit that could be layered on top of state incentives, closing the gap with foreign competitors. Actor Jon Voight has led an effort for a federal film tax deduction with the explicit goal of introducing legislation creating such an incentive Hollywood Reporter. Senator Adam Schiff and Representative Laura Friedman, both Democrats from Burbank, were among the first elected officials to call for federal action Variety.
The coalition pushing for the credit spans the political spectrum. Brian Papworth, executive director of the Coalition for American Production — a group of vendors and soundstage operators — is pressing for the federal incentive. Veteran producer Chris Fenton has been making the case on right-wing podcasts hosted by Steve Bannon, Newt Gingrich, and Matt Gaetz that supporting US film production is a MAGA policy Variety.
For the 50,000 people in Los Angeles who have lost work, and for the local film offices in states with no incentive to offer at all, the question is whether Congress will act before more productions decamp overseas.
