California Lawmakers Discuss Lifting the Cap on Film and TV Tax Credit
California lawmakers began discussing on Thursday, October 29, whether to remove the limit on the state's film and TV tax incentive. Variety reported that the talks took place at an Assembly committee hearing in North Hollywood.
The incentive is a tax credit, meaning a rebate that lowers the tax bill for productions that spend money in California. It is currently capped at $750 million. Lawmakers doubled the program last year to reach that figure.
Because the money has a ceiling, productions cannot simply apply and collect. They apply during set windows, known as periodic application periods, and compete for a place using a score called the "jobs ratio." Projects that do not score well can miss out.
At the hearing, producer Betsy Beers told the committee that a new Grey's Anatomy spinoff set in West Texas did not win a California credit. The show is now filming in Albuquerque, New Mexico, instead of Santa Clarita, California. Crews that might have worked close to home are now working out of state.
FilmLA, the agency that tracks filming in the Los Angeles area, reported that production volume there keeps falling. At the same time, the share of scripted TV shows, meaning series written from a script rather than reality or other unscripted formats, that receive a state subsidy has nearly doubled.
Other states offer different models. Georgia's film tax credit has no limit. New York's credit can draw on money set aside for future years, which makes it uncapped in effect.
Rick Chavez Zbur chairs the Assembly Select Committee on Growing and Retaining the Creative Economy in California. He said he expects to push for raising the cap or removing it altogether in the next legislative session, which begins in the new year.
For the people who build sets, drive trucks and staff writers' rooms, the cap decides where a series gets made. A show that cannot secure the credit can pack up and film elsewhere, as the Grey's Anatomy spinoff has. Whether the committee's discussion leads to a change in the law is still to be decided.
