Study: Film Tax Credit Yields $6 Billion in Spending

California’s expanded film and television production tax credit program has brought in nearly $6 billion in direct spending to the state in its first three years, a new study on the program by the California Film Commission found. “This includes $2.25 billion in qualified wages, $1.89 billion in qualified vendor expenditures, and another $1.85 billion in other expenditures which do not qualify for tax credits,” the study summarized. “Collectively, these productions are hiring more than 18,000 cast and 29,000 crew members.” Among the projects receiving tax credits were 13 television series that relocated to California from other states. With another two series relocating in the first quarter of the current fiscal year, these shows are on track to spend more than $1.2 billion in-state. “Over multiple seasons, their spending impact will be even more substantial,” the study said. The current tax credit program will end in 2020 and be replaced by the third iteration, which maintains the $330 million allocated per year through 2025. The third version of the program has some changes, including reducing the percentage of relocated series receiving money and increasing the percentage of independent feature films. Since starting in fiscal year 2015-2016, the current tax credit program has given incentives to 10 big budget feature films with budgets more than $75 million. Still, there have been a higher number of feature films made in other states and countries. In 2017, for example, of 31 features with budgets of $75 million and higher released theatrically only one was filmed primarily in California and three others partially shot in the state, according to the study. “While California has succeeded in attracting these films, the credit cap and the availability of more generous tax credits out of state continues to hinder California’s ability to attract more films of this size,” the study said.