Bipartisan lawmakers introduce bill to create 20%-30% U.S. film tax incentive

### Bipartisan Lawmakers Propose Federal Film Incentive of Up to 30% to Boost U.S. Production

A bipartisan group of U.S. lawmakers has introduced legislation that would create a federal incentive covering 20% of eligible film production labor costs, with additional provisions potentially raising the benefit to 30%.

The proposal is aimed at encouraging more film and television production in the United States as Hollywood competes with countries that offer substantial financial incentives to attract productions. The bill would add a federal incentive to existing state programs, potentially allowing productions to combine multiple forms of financial support.

Joe Chianese, senior vice president for incentives at Entertainment Partners, said the combination could make major U.S. production centers significantly more competitive with international locations. He suggested that productions in states such as Georgia, California and New York could become particularly attractive if the federal credit can be combined with state incentives.

The legislation follows roughly two years of lobbying by Hollywood labor organizations and the Motion Picture Association, which represents major film and television companies. Industry groups have argued that the decline in U.S. production has contributed to substantial job losses and reduced economic activity in traditional production centers.

Under the proposal, the federal credit would provide a base benefit of 20% of qualifying labor costs, covering both above-the-line and below-the-line workers. Additional 5% incentives could be available for qualifying productions filmed in rural areas or for independent productions, potentially bringing the total federal incentive to 30%.

Los Angeles County would also be eligible for a temporary 5% increase under the proposal because of its designation as a federal disaster area, according to details reported by Variety.

Rep. Nathaniel Moran, R-Texas, one of the bill's sponsors, said the proposal is intended to strengthen domestic production and support workers rather than simply provide assistance to Hollywood studios.

Sen. Adam Schiff, D-Calif., has also advocated for a federal production incentive for several years. He has argued that a national program could help address the movement of production and associated jobs to countries offering more generous incentives.

The debate comes after a prolonged downturn in U.S. production. Hollywood unions and industry representatives have pointed to significant employment losses in Los Angeles and the migration of productions to jurisdictions offering rebates and tax credits.

The United States is competing with a large international market for film and television production. Countries including Canada and the United Kingdom, along with numerous other jurisdictions, have established programs designed to reduce production costs and attract projects.

Several U.S. states already offer substantial production incentives. California, for example, has expanded its film and television tax-credit program to $750 million annually. The state program provides credits that can cover a significant portion of qualified production expenditures, depending on the project and its eligibility.

A federal program could therefore operate alongside existing state incentives rather than replacing them. That stacking mechanism is one of the central features of the proposal because producers could potentially combine federal and state benefits when determining where to shoot.

The proposal also comes as Hollywood faces broader changes in production patterns. Streaming, changing audience behavior, cost pressures and international competition have all contributed to shifts in where films and television programs are produced.

Industry supporters say federal assistance could make domestic production more competitive and help preserve employment in areas ranging from acting and directing to construction, transportation, lighting, sound and post-production.

The potential impact on international competitors remains uncertain. Chianese noted that countries such as the United Kingdom and Canada could respond with additional measures to protect the production industries they have developed through their own incentive programs.

That possibility could lead to another round of competition among countries seeking to attract film and television spending.

The proposed legislation therefore represents a significant potential change in U.S. film policy, but its eventual impact will depend on congressional action, the final structure of the program and how states and international production markets respond.

For Hollywood, the central issue is whether a federal incentive can help bring more production back to the United States while generating enough domestic economic activity and employment to justify the public cost of the subsidies.