MPA lobbies for 20% federal film tax credit to boost production

A federal incentive would fundamentally shift the domestic production landscape by layering federal relief on top of existing state programs like those in Georgia and New York. This move signals a strategic pivot from interstate competition to a unified front against aggressive international subsidies in Canada and the U.K. For streamers like Paramount, a federal credit could offset rising production costs and mitigate the impact of state-level budget cuts, such as Louisiana's recent reduction to $125 million. Watch for the specific language regarding above-the-line salary caps, as this will determine if the credit benefits high-budget star vehicles or focuses strictly on below-the-line labor.

The Motion Picture Association's push for a federal film tax credit arrives amid intensifying competition from international incentive programs that have drawn production away from U.S. markets. Canada's federal and provincial tax credits, particularly in Ontario and British Columbia, have attracted major studio projects with combined effective rates exceeding 40%, while the U.K. replaced its previous film tax relief with the Audio-Visual Expenditure Credit in April 2024. The U.K. Treasury set the Audio-Visual Expenditure Credit rate at 34% of qualifying expenditure for film and high-end television, making it one of the most generous national incentives globally. These international programs have been cited repeatedly by MPA leadership as the primary driver of domestic production losses.

State-level incentive programs in the U.S. have faced budget pressures that a federal credit would aim to offset. Louisiana reduced its annual film tax credit cap in recent years, a move that industry observers warned could push productions toward competing states or international markets. Georgia's entertainment tax credit, which offers a 20% base incentive plus an additional 10% for qualifying Georgia promotional logos, remains the largest state program by total spend. Georgia's film and television production spending reached $4.4 billion in fiscal year 2023 according to the Georgia Film Office, making it the dominant domestic production hub. The Coalition for American Production, which includes major studios and labor groups, has argued that a federal layer would prevent the race-to-the-bottom dynamic where states compete against each other rather than against foreign subsidies.

The economic case for federal intervention draws on data showing sustained production declines in traditional U.S. hubs. Los Angeles County's film and television employment fell sharply between 2022 and 2025, with FilmLA's quarterly permit reports showing continued weakness in on-location shooting days. FilmLA reported that on-location shooting days in the Los Angeles area declined significantly through 2024, reinforcing the argument that domestic capacity is eroding. The proposed 20% labor credit structure mirrors approaches used in Australia, where the Producer Offset provides a 30% rebate on qualifying Australian production expenditure. Screen Australia's 2023-24 annual report documented A$1.9 billion in production spending supported by the offset, demonstrating how a well-structured national incentive can sustain a production ecosystem. The MPA's Charles Rivkin has framed the as essential to maintaining the U.S. position as the world's leading production market, arguing that without federal action, the domestic industry risks permanent capacity loss to jurisdictions with more aggressive subsidy regimes.