U.S. States Race to Lure Hollywood Productions

California, Georgia, and New York update film tax credits to win the production arms race.

Lights, Tax Credit, Action

With streaming-budgets tightening and global production hubs mounting pressure, U.S. states are pulling out the big guns. States once happy to take the scraps of big studio shoots are now offering full-blown red-carpet incentives. The goal? Keep cameras rolling, crews working, and dollars flowing locally — rather than being exported to sanitised tax-haven versions of “filmmaking.”Take California: its flagship Film & Television Tax Credit program just got a huge boost, from an annual cap of $330 million to $750 million beginning fiscal-year 2025-26. The invitation is clear: come back to the Golden State.

In New York, legislators aren’t just matching — they’re upping the ante. The 2025-26 state budget increases annual credits to up to $800 million, with a dedicated $100 million pool for independent production. Meanwhile, Georgia remains the benchmark: uncapped credits, proven track record, and still a magnet for big-budget blockbusters.

Credit Percentages, Job Markets & Competitive Moves

California’s new terms:

• Annual cap soared to $750 million.

• Program runs through June 30, 2030 under version 4.0.

• Expanded eligible categories: animated features, live-action series with budgets over $1 million per episode, large-scale competition TV.

• The base rate for qualified productions is rising; under AB 1138 the credit rate jumps to as high as 35–40 % for qualifying motion pictures.

New York’s updated structure:

• Production tax credit for qualified film/tv eligible costs: up to 30% (or more with regional uplifts).

• Post-production credit: up to 30-50% of qualified post-production costs in NY state facilities.

• New “independent film” credit pool: $100 million annually, 30% credit on qualified costs for qualifying projects.

• Total annual credits now up to $800 million under the current budget cycle.

Impact on local labor and production markets:

• California’s boost is projected to generate roughly 6,700 new cast & crew jobs and roughly $1.1 billion in spending for the 16 newly-approved projects under the expanded program.

• In New York, film & tv industry activity generated $18.3 billion in GDP impact and $31.9 billion in total economic output over a two-year period; $10.9 billion of that came from productions supported by the tax credit program.

• With Georgia offering uncapped credits and low production cost base, both California and New York are essentially engaging in an arms race for production spend.

International Ripples and What It Means Globally

The U.S. isn’t the only player in the game. Canada, the U.K., Australia and various European countries continue offering generous incentives — often cash rebates, transferable credits, or refundable incentives. When a U.S. state moves the needle, it sends a signal globally. Producers compare theatres (work‐for‐hire labour pools), incentives, exchange rates and studio infrastructure when deciding where to film.

California’s move to $750 million and New York’s escalation to $800 million essentially resets the U.S. domestic benchmark, forcing international jurisdictions to evaluate their own competitiveness or risk losing global production dollars. Some smaller U.S. states are adjusting or introducing “mini-cap” credits, hoping to carve out niche production lanes (e.g., for unscripted TV or docu-series).

Looking Ahead: What Producers and States Should Watch

• Sustainability of funding: Do these incentive budgets hold up through economic downturns? California has extended its program to 2030 — but that renewal isn’t guaranteed beyond subsequent budget cycles.

• Labour supply and infrastructure: Tax credits matter, but so do experienced crews, studio space, and post-production facilities. California still leads in that respect, but competition is ripening.

• Expect upward pressure on rates: As states indulge in incentive escalation, the relative value of credits may diminish unless paired with local crew bills.

• Fiscal scrutiny: New York’s watchdogs already critique the return on investment. Taxpayer push-back could impose future reform.

• Global competitiveness: With U.S. states moving faster, international locations must either offer more favourable incentives or pivot toward unique production niches.

Between subsidy stacks, budget caps and studio location scouts, the new production incentives war is well and truly on. States like California and New York aren’t just trying to retain business — they’re trying to dominate it. Georgia may still lead in volume for now, but with these new offers, the production map is shifting.

For producers, it’s simple: follow the credits. For states, it’s harder: make sure the credits follow the jobs.