Lawmakers unveil Hollywood tax incentive proposal

As seen in Politico.

Lawmakers introduced bipartisan legislation Thursday to create a federal tax incentive for film and television production, putting Donald Trump’s push to prop up Hollywood in front of Congress.

The stakes are high for the entertainment industry, which has been battered by years of work shifting to countries with lucrative tax credits. But the proposal could face resistance from conservatives wary of a new tax break — particularly one benefitting an industry centered in heavily Democratic California.

The effort involves an unlikely mix of figures — Sen. Adam Schiff and Rep. Laura Friedman of California, red-state lawmakers, Trump and the president’s Hollywood ambassador, Jon Voight. South Carolina Republican Tim Scott introduced the legislation in the Senate, while Texas Republican Nathaniel Moran did so in the House.

But it’s the support of Trump, who has called for the incentive in recent weeks, that likely has spurred the most momentum for the proposed credit.

Congress should create the credit “immediately,” the president said on social media last month, arguing that too many productions have “moved to Canada, and other Countries, with very little work being done anymore in the United States. Hollywood is a Complete and Total Disaster!” he wrote.

Schiff, who was Democrats’ point person in Trump’s first impeachment trial, told reporters during a virtual news conference on Thursday that this was one time that he was happy to see a social media post from the president.

“Not something I say often, but I really was,” Schiff added. “I’m thrilled with his support for this.”

The bill’s introduction, industry boosters say, could one day be seen as a turning point for Hollywood: the start of a push to bring work back from the far-flung constellation of countries — Canada, Australia and the United Kingdom among them — that have long drawn film and TV production away from the U.S. Lawmakers aim to pass it during Congress’ lame-duck session after the November midterms.

The bipartisan support reflects a political reality: there are several production hubs in Republican-led states, among them Georgia and Louisiana. Roughly 40 states have their own production incentives, including California, which more than doubled its program last year to $750 million annually. But the state has continued to lose shoots to other locales, and Los Angeles County lost more than 42,000 film and television jobs between 2022 and 2024.

Earlier this month, a report commissioned by the Motion Picture Association, which represents and lobbies on behalf of major Hollywood studios, projected a federal incentive would lead to $125.3 billion in additional U.S. production spending from 2027 to 2035. It also forecasted that the measure would support 143,500 additional full-time-equivalent jobs in an average year and generate $133.1 billion in additional labor income during the credit’s first nine years.

Charles Rivkin, CEO of the Motion Picture Association, said in a statement that the legislation “would deliver a true gamechanger for American creators, workers, and businesses — a federal incentive that supercharges production at home, fuels jobs and growth in local communities, and makes the United States a more competitive destination for the next generation of great film and television.”

The legislation would create a transferable federal tax credit equal to 20% of U.S.-resident labor costs for productions with at least $1 million in qualifying expenditures and at least 75% of their principal photography days in the country.

It could be applied to labor costs for performers, writers, directors and producers, as well as crew members. The base credit can rise to a maximum of 30% through 5% bonuses, including those for filming in rural opportunity zones or federally declared disaster areas, among others. It also is available for post-production and visual effects activities done in the U.S., provided 75% or more of those costs are incurred here.

The federal incentive could be combined with state credits, making the package especially enticing in states with robust programs, said Joseph Chianese, a senior vice president at Entertainment Partners, where he advises companies on production incentives.

“If this passes, shooting in the U.S. in places like California, New York, Georgia, and New Jersey will be the best deal on the planet,” he said. “Nothing comes close to it.”

The process has unfolded in fits and starts and hinged in part on the president’s interest. Voight’s advisers have said that an account they shared with Trump — one of them explained that he had been forced to consider shooting a film about Richard Nixon overseas to take advantage of more generous incentives — led to the president’s social media post in August, pushing the legislation to the fore.

But the project traces its roots, in part, to 2025, when Friedman began building a coalition to back the legislation, drafting an early version of the House bill and recruiting Republicans. She joined Schiff for a hearing in Burbank in March that spotlighted the job losses fueled in part by runaway production in California and beyond. Earlier this month, Friedman co-founded the bipartisan Congressional American Film & TV Production Caucus with other lawmakers supportive of the federal incentive.

“Every other country has figured this out. Now it’s our turn,” Friedman said during Thursday’s virtual news conference. “What’s been missing is a federal government that’s been willing to partner and compete for those workers.”

In Hollywood, where the proposed settlement of the antitrust litigation seeking to block Paramount Skydance’s acquisition of Warner Bros. Discovery has roiled the industry in recent days, the federal incentive has drawn broad support. An array of interests, including the Motion Picture Association, several entertainment unions and talent agencies, have advocated for the legislation, which Trump named The Motion Picture, Television, and Entertainment Revitalization Act in a social media post earlier this month.

Chianese, a Hollywood veteran, said he’d “always hoped for this.”

“There has never been more bipartisan support,” he said. “This is being positioned not as a subsidy for studios — but as a jobs credit for crews.”

Still, there could be opposition that centers on the cost of the incentive. Rep. Rich McCormick (R-Ga.) previously told POLITICO that he was “really not a big fan of federal subsidies because, once again, we’re in 30 percent deficit spending right now.”

“Georgia’s a major film-producing place, and I always want to help Georgia out,” he said. “But I also want to make sure that it makes sense for the American people when it comes to how we pay for it and how much comes back to us in tax money.”

The bill comes as new polling from POLITICO and its partners shows California voters are interested in more support for Hollywood: 52 percent favor increasing state tax credits or other incentives to keep work in the state.