Lawmakers Move to Undo a New Cap on Hollywood's Film Tax Credit

Sen. Ben Allen and Assemblymember Rick Chavez Zbur say the credit drew 170 projects in its first year.

Independent film and television productions would sit outside a new state tax cap under a budget trailer bill introduced in Sacramento. It's numbered AB/SB 186, and the authors are State Sen. Ben Allen, D-Santa Monica, and Assemblymember Rick Chavez Zbur, D-Hollywood. The Santa Monica Daily Press reported the introduction on September 6, 2026.

The people on the other end of it are the cast and crew on projects that already have a credit reserved. Lawmakers say SB 122, a corporate tax bill enacted in June, unintentionally stacked a second cap on top of the film program's existing one, undercutting commitments the state had already made to productions in motion.

The credit isn't new. Gov. Gavin Newsom signed the California Film & Television Jobs Act last year, written by Zbur and Allen. It raised the program's annual cap to $750 million, increased the credit amount and widened eligibility. The authors' stated target was "runaway production," and the bill drew support from both parties.

The program's first year ran July 1, 2025 through June 30, 2026. Credits went to 170 new projects in that window, the Santa Monica Daily Press reported. The paper put the associated economic activity at an estimated $6.6 billion and the job count at nearly 35,000 statewide.

The new measure would do three things, per the Daily Press:

• Independent productions would be exempt from the SB 122 caps.
• Refunds under the 4.0 version of the program would be discounted 5 percent instead of 10.
• Those refunds would be paid out across two years rather than five.
• Unused credits earned under the older 2.0 and 3.0 programs wouldn't expire early if the company holds an award under 4.0.

Allen framed the original act as a jobs measure and the trailer bill as protection for it.

"Last year, we took action to get families back to work and jumpstart the state's film and television industry."

Zbur said the effort protects last year's progress and is a priority shared by many of his colleagues, the outlet reported. He put the first-year haul at 170 projects and close to 35,000 cast and crew jobs. The trailer bill, he said, would give productions and workers more stability while blunting the tax credit limitation, and more work remains in the coming months.

What that leaves is a clock. Allen credited Newsom and legislative leadership with finding a path forward, the Daily Press reported. He said the state stands to lose jobs and the industry's momentum if lawmakers don't move by month's end. That puts the trailer bill's window at the close of September 2026.

Source: smdp.com, retrieved September 6, 2026.