California backs finish work with $10 million post-production credit

California will pay productions to finish their films and shows in the state, even if cameras rolled elsewhere.

Governor Gavin Newsom signed Assembly Bill 2319 on 19 September at the Television Academy in Hollywood, creating a $10 million tax credit for post-production work, meaning editing, sound mixing and visual effects after filming Office of the Governor. The bill passed the California Assembly and Senate by wide margins, according to Variety.

The change fixes a catch in the state's main incentive. California recently increased its film and TV tax credit, a cut to a production's tax bill, to $750 million. That credit covers post-production costs only if 75% of a project's overall budget is spent in California. The new standalone credit breaks that link. A film shot in another state or country can still get support for editing and effects work done in California.

The rate is 35% to 50% on qualified post-production expenses, as earlier reported by CBS News. The $10 million total is far smaller than the $100 million sought by the Motion Picture Editors Guild. In May, the bill was amended to require that 85% of the funding support jobs paid at union-level wages and benefits.

The legislative push was led by Assemblyman Nick Schultz, D-Burbank. His office puts the state's post-production workforce at about 12,000 people and says the sector lost 1,874 jobs over the past 20 years. The stated goal is to stop that work drifting to other states and overseas. The California Post Alliance, a coalition of post facilities, campaigned for the bill, and Los Angeles Mayor Karen Bass joined post workers to urge Newsom to sign it.

California is following a familiar model. The United Kingdom, Canada, Australia and Spain all offer standalone incentives for post-production. So do New York, New Mexico and New Jersey.

Newsom also signed a second measure, SB 186, aimed at how the credits are used. It exempts independent films from California's $5 million cap on corporate tax credits. It lets studios shorten the payback period on refundable credits, where the state pays back any balance left after tax is owed, from five years to two years. And it extends the life of older, non-refundable credits from nine years to 15 years.

For viewers, this means little changes on screen. The credits decide where the finishing work happens, and which crews get to finish the story.