California lawmakers propose tweaks to film tax credit cap

Legislators in Sacramento have filed a budget fix that adjusts California’s $5 million annual cap on film-industry tax credits. Authored by Assemblymember Rick Chavez Zbur and Senator Ben Allen, the proposal does not grant a blanket exemption for all film and TV credits, but it does fully exempt independent films from the limit. For major studios, the bill shortens the cash-out repayment window from five years to two years and lowers the discount from 10% to 5%, making the refund option more attractive.

It also prolongs the usability of existing non-refundable credits issued before 2025, adding up to five years before they expire. The Motion Picture Association, the Producers Guild of America and the Entertainment Union Coalition have voiced support, while negotiations with Governor Gavin Newsom avoided a broader industry carve-out that could have spurred similar demands from other sectors.