EXCLUSIVE The elusive goal is in sight but the finish line is still a way off in the race to get a federal film and TV tax incentive bill passed and signed into law by Donald Trump, California’s junior senator says.
“Over the past two years, Senator Adam Schiff has been working to build bipartisan support for his federal film tax incentive legislation,” a spokesperson for the man once known as the Congressman from Hollywood told Deadline this evening.
“There is bill language, and currently, leaders in the Senate, House, and Trump administration are engaging in conversations to finalize text,” the aide added, confirming a dramatic turn of events in just the last few days.
“Negotiations are ongoing.”
To that, the working figure on the Trump-coined Motion Picture, Television, and Entertainment Revitalization Act is a 20% tax credit. That credit could rise at least another 5% to 10% if filming occurs in rural areas or the production wealth for the same project is spread among several states, sources tell me.
Still, talks are fraught with expectations that all regions of the country will get something out of any new program. There is hope that the incentives are flexible and rich enough to bring production to states that had previously seen very little filming in their borders.
California Democrats Linda Sanchez and Laura Friedman are spearheading the effort in the House of Representatives, Deadline has confirmed. Our corporate cousin Variety earlier today first mentioned Ways and Means committee member Sanchez and ex-Rysher Entertainment executive Friedman, the successor to Schiff in Burbank, in relation to the potential legislation. Republicans Nathaniel Moran (R-TX) and Brian Jack (R-GA) are also in the mix, though the degree of their participation, even with Trump’s vehement backing of the incentive, is unclear.
“A lot of details are being worked out, what the priorities are,” a Hollywood political operative with strong industry and DC ties said today of the state of any possible legislation.
Indications are that the bulk of what is being discussed behind closed doors is based in large part of the format and execution of California’s now $750 million annual program.
Like the Golden State incentives under outgoing Governor — and likely 2028 White House candidate — Gavin Newsom, who has been advocating for a 20 – 25% federal tax credit for awhile, will allow producers and studios/streamers a menu of methods by which to redeem the incentives over a number of years — some potentially faster than others. Another big component of any federal incentive is to snag relocating productions. Series or films first made outside the country or content that had already been assured foreign credits but haven’t yet started production will be strongly encouraged to come Stateside.
It also seems some of the language circulating in draft form is lifted from suggestions put forth earlier by Paramount CEO David Ellison in private get-togethers with Congressional members. Reps for Paramount did not respond to Deadline’s request for comment or clarity on Ellison’s influence in the tax credits scheme.
What is also clear is that for Dems, the emphasis is on keeping production and jobs in the home of Hollywood and in New York. Equally crystal at this juncture is that for the GOP, which is having a midterms centric mini-convention in Dallas starting Wednesday, the key states for entertainment industry consolidation and growth are Texas and Georgia. Almost more than the Golden State, the one time home of The Walking Dead and every Marvel movie has been hit hard by big budget productions moving to overseas jurisdictions with even more lucrative incentives than the uncapped Peach State.
“Georgia is in play now in almost every election, and Republicans get that the movie industry is a strong source of jobs and pride,” the political operative stated. “It’s an easy sell, even to people who hate liberal Hollywood.”
Of course, as fickle as Trump can be, having the former Apprentice host now loudly backing his pal Jon Voight’s plan makes the shift (no pun intended) more palatable for most GOPers and their MAGA base.
At the same time, for all the hoopla the past two weeks around any federal program to increase production, bring back lost entertainment industry jobs and businesses, and fill state coffers with tax revenue, the pathway to Trump’s Oval Office desk is not so smooth — even with bipartisan backing and unexpected bedfellows.
Both chambers of the current Republican controlled Congress are set to put a “Close for the midterms” sign up on their respective doors in a matter of days. Add to that the expectation that DC will be a ghost town from October to the second week of November for the pivotal election, a lot of Republicans will be in the Lone Star state the rest of this week for the Dallas 2026 confab.
As the calendar and other political realities constrict passage of any significant federal incentive, there is also the procedural requirement that the measure go to the Joint Committee on Taxation.
Chaired by Sen. Mike Crapo (R-ID), the theoretically nonpartisan assortment of five Senate Finance Committee members and five House Ways and Means Committee members is charged with assessing what a program could cost and what it could bring into the IRS. Specifically to this matter, the Committee is tasked with looking at any and all tax credit initiatives that exceed $2 million — which the multi-billion dollar Motion Picture, Television, and Entertainment Revitalization Act will certainly surpass many times over.
So, as Hollywood sees boffo box office this summer but tens of thousand of jobs are lost in and around L.A. and worries of more layoffs from a Paramount-Warner Bros Discovery merger loom, the mantra around federal tax credits may be quite simple: Hurry up and wait, for now.
Ted Johnson contributed to this report
