Friday 5 September 2014

California Senate Passes Film Production Tax Credits Bill

This blog recently discussed California Assembly Bill 1839 concerning film production tax credits, here.  The bill is designed to incentivize the production of films (and create jobs) in California.  As noted in the previous post, the Milken Institute provided numerous recommendations modifying California's current film tax credit system. Assembly Bill 1839 followed many of the recommendations of the Milken Institute, but appeared to retain the criticized lottery system for determining who would benefit from the tax credits.  As discussed in the Los Angeles Times, after negotiations with Governor Brown, the Senate passed a version of the Bill that decreased the total amount of tax credits from $400 million a year to $330 million a year.  This still more than triples the amount of the tax credit from the current film tax credit system.  Moreover, the lottery system is also expressly abandoned for a system which allocates the tax credits based on number of jobs generated by the project.  This seems to heavily favor blockbuster, big budget movies.  However, the Assembly Bill does expressly allocate some funding for independent films. 

There is little doubt that Governor Brown will sign the Bill.  The current version appears to be a done deal: $330 million a year for tax credits, blockbuster movies are included and the lottery system is dead.  As to the total amount of tax credits, this is still less than the $420 million amount of film tax credits provided by New York State. 

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