Steve Hilton pitches 40% tax credit to bring production back to Hollywood

California Republican candidate for governor Steve Hilton has promised a 40% tax credit for films and television shows shot in the state, rising as high as 50% for five years.

Hilton, a former Fox News host now trailing Democrat Xavier Becerra in the polls, laid out the plan on Wednesday, 14 October, as part of his bid to revive Hollywood production, Variety reported. His campaign calls the proposal “Bring Hollywood Home”, according to his campaign website.

California currently offers a 35% tax credit on below-the-line costs, meaning crew wages, sets, costumes and editing, for selected films and television shows, with bonuses that can lift the rate to 45%. Hilton would raise the base rate to 40% and widen who can claim.

The plan would scrap the state’s $750 million annual cap on the incentive programme. In its place, credits would become automatic, with continuous rolling approvals and a decision within 30 days.

Hilton would also extend eligibility to salaries for actors, directors and writers, known as above-the-line costs, and to commercials, documentaries and reality TV, all currently excluded. He had previously pledged to remove the cap and include above-the-line pay.

Studios and soundstages are a second focus. The proposal includes a five-year sales tax exemption on building materials for studio construction, plus state-backed bond financing for buying, building and renovating studios, and support for soundstage modernisation.

That repair push lands against weak numbers. Soundstages in Los Angeles are at 62% occupancy, according to the latest FilmLA report. Governor Gavin Newsom approved a $150 million incentive to boost soundstage construction in 2021, funding that has since been depleted.

Jobs are the sharpest point. Both Hilton and Becerra acknowledge a downturn of about 52,000 production jobs across California over the last four years. For crews, that is the gap the next governor is being asked to close.

There is one area of agreement. Both candidates back a federal film incentive introduced in Congress last month that would create a 20% tax credit on all United States labour costs.

What makes this stand out is the scale of the state offer. An automatic 40% to 50% credit would be well above today’s capped 35% to 45% system. Whether lawmakers and voters buy it will shape where the next wave of shoots lands.