Motion Picture Association Seeks Vast Expansion of California Tax Credit
variety.comGene Maddaus Senior Media WriterThe Motion Picture Association unveiled a report on Friday that calls for a vast expansion of the California film and television tax credit.The report contends that the credit generates billions of dollars in economic benefits for the state and produces a positive return in state and local tax revenue.
The report advocates expanding the state credits for film and TV production and for the construction of soundstages, as well as creating a new credit for visual effects work.The report also argues for making the existing credits refundable or transferrable, which would allow studios to benefit even if they do not have tax liability in the state.The MPA represents six studios — Disney, Netflix, Warner Bros., Sony, Universal and Paramount — and has led the charge in pushing for increases in state tax credits across the country over the last two decades.
The organization funded the report, which was prepared by the Los Angeles Economic Development Corporation. The report studied “Program 2.0,” the $330 million annual credit that ran from 2015 to 2020.
The authors used a multiplier to estimate the direct and indirect economic benefits from the credit, finding that the program generated $12.4 billion in direct spending and $21.8 billion in total economic output.The California Film Commission, the state agency that administers the credit, has also studied Program 2.0, but came up with a significantly lower estimate.
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