Gavin Newsom signs bill to create new film and TV tax credit in California

Key Points:

• California Governor Gavin Newsom signed Assembly Bill 2319, creating the state's first standalone tax credit specifically for post-production work, offering a 35% to 50% credit on qualified expenses for editing, sound, music, visual effects, and finishing.
• The new credit targets post-production activities without requiring filming in California, a shift from the existing incentive that requires at least 75% of filming or budget to be spent in the state, aiming to counteract the decline in California's share of US post-production employment from 53% to 42% over 13 years.
• Despite initial plans for a $100 million fund, lawmakers approved only $10 million for the new post-production credit, reflecting a smaller-scale effort amid broader state investments, including a recent increase of the Film and Television Tax Credit Program to $750 million annually through 2030.
• The tax credit initiative coincides with ongoing tensions between California officials and major studios, notably the Paramount-Warner Bros. merger dispute, with Governor Newsom advocating for a settlement to protect local entertainment jobs while Attorney General Rob Bonta leads a lawsuit opposing the merger.
• Newsom’s office projects that recent expansions of the state's incentive programs will support over 170 projects, generating $6.6 billion in economic activity and nearly 35,000 jobs statewide, signaling a strategic push to retain and grow California’s entertainment industry amid federal and industry competition.