California’s film and TV tax credit program is a step closer to being extended five years beyond its scheduled expiration after a key legislative committee passed a measure deemed crucial to keeping Los Angeles and other regions competitive for production business including soundstage development.
The state Senate’s Governance and Finance Committee voted 4-0 Thursday in favor of Democratic Sen. Anthony Portantino’s proposal to extend the tax credit program by five years beyond its current expiration date of June 30, 2025.
“A long-term investment means that we can have generations of entertainment careers created in California and it will allow us to remain competitive with other states,” Portantino said in a statement Thursday after the vote, noting soundstage development in particular could create thousands of jobs and millions of dollars in new economic investment in the state.
Portantino said the measure is supported by a broad coalition of labor, media production and other business leaders. Approved in its current form in 2015, the program offers tax credits ranging from 5% to 25% for qualified expenditures and has generated $17.9 billion in media production spending in the state, according to the California Film Commission, which administers the program.
A spokeswoman for Portantino, whose Los Angeles-area district includes the cities of Burbank, Glendale and Pasadena, said Senate Bill 485 is expected to go before the Senate Appropriations Committee by Jan. 18, though a formal hearing has not been scheduled. If approved there, it would go to the full Senate and would need approval by the state Assembly and Gov. Gavin Newsom.
Lawmakers last year doubled the existing $330 million in available tax credits for the program, with $150 million of that additional sum dedicated to encouraging developers and production companies to build new soundstages in California.
Proponents said that portion of the incentives was especially important for encouraging future development of production space in California, as producers push to meet escalating demand being created by a growing slate of streaming media services hungry for new movies and TV shows.
TV production in particular has been putting pressure on available production space in the Los Angeles area, where soundstages have consistently been at least 95% occupied for the past five years, according to FilmLA, which tracks production trends. In response, several prominent developers and investors have during the past year put forward multimillion-dollar plans that would add dozens of new soundstages throughout the Los Angeles area.
The region remains far ahead of most others globally when it comes to soundstage facilities for movie and TV production, currently topping 5 million square feet. But several lower-cost regions have stolen big chunks of that lucrative production business from the entertainment capital over the past decade, including cities in Georgia, New Mexico, Ontario and British Columbia.
Author Credit: CoStar