US prepares 20% federal production incentive

The US is introducing legislation that would create a 20% federal tax incentive for TV and film productions applicable to scripted and most unscripted projects, a move described as a “gamechanger” for the country’s creative sector.

The Motion Picture, Television and Entertainment Revitalisation Act was brought before Congress on Thursday and has the backing of both Democrats and Republicans.

The bill’s introduction, which follows vocal support from president Donald Trump, would allow for a 20% transferable tax credit applicable to the wages of actors and directors, as well as those in back office roles.

A 5% bonus for shoots in economically deprived opportunity zones and rural areas is also in the bill, while importantly a 5% uplift is available for productions in federally declared disaster zones. The latter applies to LA County, following the 2025 wildfires.

To be eligible, the production budget must exceed $1m and 75% of the show or film must be produced in the US.

The scheme is applicable to scripted and unscripted TV shows, although there are caveats such as daytime dramas, gameshows, live sports and talkshows, which are not covered.

Additional support will be available to productions taking place across more than 10 states and for companies that increase their US spend that had previously been put into producing abroad.

The incentive will also be stackable, allowing producers to combine it with increasingly competitive state-based schemes.

The move comes in the wake of recent statements by president Donald Trump in favour of an incentive, a move that has attracted bipartisan support and which was initially mooted last year in Hollywood envoy Jon Voigt’s plan to revive the US production sector. A recent study found that a US incentive could provide a $125bn production boost to the country.

It raises numerous questions for international producers, however, with many countries enjoying considerable inflows of US shows and the budgets that come with them.

The UK, Spain, Canada, Australia and Hungary have been among those to capitalise on high production costs in the US: Netflix chose the UK for its production of Monopoly, while recent launch launches such as Wonka’s The Golden Ticket headed to Australia. 

Ireland also recently introduced an unscripted incentive, with Fox a frequent visitor to the country for productions of US series ranging from The Floor to Next Level Chef.

Timeline & next moves

While the bill has been introduced, its immediate progress is unclear. First, its contents must be agreed on by the House of Representatives before it can go before the Senate. Only once it passes both houses can it be approved by the president.

Mid-term elections mean the House is already in recess and the Senate is soon to follow, but the bill’s broad backing means it is likely to find a smooth path through. Adam Schiff, a Californian Democrat senator, suggested the legislation could be attached to another bill already making its way through the system and become law by the end of the year. Schiff is joined by other senators including Republican Tim Scott of South Carolina in sponsoring the bill.

Motion Picture Association chief exec Charles Rivkin welcomed the development on Thursday, describing the bill as a “true gamechanger for American creators, workers, and businesses”.

He added it would “supercharge production at home, fuel jobs and growth in local communities, and make the United States a more competitive destination for the next generation of great film and television.”

Rivkin added that the legislation “could inject $250bn into the country’s economy and deliver nearly 145,000 new jobs every year across all 50 states.”

California Governor Gavin Newsom, who called on Congress to create a federal incentive in May, said: “California is the entertainment capital of the world. We have the talent, infrastructure, and the creativity to support it — and we are making historic investments to keep production here.

“But this is bigger than our state alone. I support this bipartisan effort to ensure that this industry can compete globally to protect the jobs, businesses and communities that depend on it.”

Christopher Nolan, president of the Directors Guild of America, said the bill was the “most significant legislative effort in a generation” for domestic film and TV production.