MPA says federal tax credit could double US film and TV production

American film and TV production spending could double to $34.7 billion by 2032 if Congress passes a federal tax incentive, the Motion Picture Association says.

The estimate comes from a report prepared for the MPA by consultancy Olsberg SPI and published on 15 September, as the association campaigns alongside Hollywood unions for a national tax break to revive domestic production Variety.

A tax credit here means a cut to a production's tax bill worth a share of what it spends. The report models a 20% federal credit. It projects that credit would support about 143,500 production jobs per year.

Without an incentive, the report puts US spending at $16.9 billion in 2032. With it, spending reaches $34.7 billion. Over 2027 to 2035, it projects an extra $125.3 billion in cumulative production activity and $249.1 billion in total economic impact once wider spending by crews and suppliers is included.

The argument rests on global share. Data supplied to the MPA by ProdPro puts the US at 34% of global film production and 42% of TV production now. The study assumes those shares fall to 25% for film and 29% for TV by 2035 without a US incentive. With an incentive, it assumes the US would capture 65% of global production spending.

The report also tested the idea on 20 recent films from member companies. It found 16 of the 20 would have been financially competitive to shoot in the US rather than abroad with a 20% credit in place.

Part of the case is competition. There were 86 national, state and provincial production incentives around the world in 2017. There are now 121, according to the study.

The political push is already moving. Donald Trump urged Congress to immediately approve a Federal Production Incentive to create entertainment jobs in America Deadline. The proposal discussed so far would offer 15% to 20% on production labour and be stackable with state incentives, meaning it could be claimed on top of existing state breaks Los Angeles Times. Members of Congress are preparing a draft bill for a 20% incentive with bonuses of up to 30% for US-based production.

The MPA study sets out limits to its own maths. It assumes outside factors stay static and does not account for whether other countries would raise their own incentives in response to a US credit. It also does not estimate the economic return per dollar of public money invested.

For people who make shows and films for a living, this is about where the next job shoots. The MPA, led by chairman and CEO Charles Rivkin, says the credit would keep more of that work in the US. Congress has not yet voted.