California Lawmakers Near Deal to Address Impact of Tax Cap on Film Credits

The agreement falls short of a full carveout for the entertainment industry from a $5 million annual limit on corporate tax credits.

By Gene Maddaus

Gene Maddaus

Senior Media Writer

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California lawmakers are closing in on a deal to help film producers who are facing new limits on their ability to monetize production tax credits.

The agreement falls short of the entertainment industry’s goal of a full exemption from a $5 million annual cap on corporate tax credits, according to multiple sources.

The state budget, approved in June, imposed the across-the-board limit for the next three years in a bid to stabilize state revenues. The Motion Picture Association and a coalition of Hollywood unions protested the measure, saying it would hamstring the state’s $750 million incentive for film and TV production by making it impossible for larger companies to redeem their credits.

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