Governor Proposes Major Expansion of California Film and Television Tax Credit Program

Gov. Gavin Newsom is proposing another major expansion of the California Film and Television Tax Credit program to help strengthen and support the state’s iconic entertainment industry.

The historic proposal would increase the tax credit program’s annual cap from $750 million to $1 billion through 2040. The move, according to the governor’s office, would attract more productions to the state, support stable, long-term work across the industry, and strengthen California’s creative economy.

The proposed changes also include expanding eligibility for qualifying expenses, introducing incentives for companies that commit to at least two qualifying productions, and increasing independent film funding to $100 million annually.

CalChamber Supported Previous Program Expansions

The tax incentive program has been expanded in the past, most recently in 2025 following the passage of California Chamber of Commerce-supported AB 1138. The Cost Cutter bill raised the program’s annual cap from $330 million to $750 million. CalChamber also backed efforts included in the 2023-24 state budget that extended the program through 2030, helping grow and retain jobs in one of California’s signature industries.

Since the California Film and Television Tax Credit Program began in 2009, it has generated more than $35.4 billion in economic activity while supporting more than 248,000 cast and crew jobs. The Los Angeles County Economic Development Corporation reports that every tax credit dollar allocated results in at least $24.40 in economic output, $16.14 in gross domestic product (GDP) and $8.60 in wages for the state.

Renewed Calls for Federal Legislation

Gov. Newsom is also urging Congress to act to support the industry at the federal level through the Motion Picture, Television, and Entertainment Revitalization Act, which was introduced in September 2026. If passed, it would create a 20% federal tax credit that could be layered on top of state incentive programs to encourage film and television production both in California and across the country.