Hollywood’s long-running battle against runaway production has reached Washington.
A bipartisan group of lawmakers has introduced legislation that would establish the first major federal film and television production tax credit, an effort designed to make the United States more competitive with countries that have successfully attracted American productions with aggressive financial incentives.
The Motion Picture, Television, and Entertainment Revitalization Act, introduced September 24, would create a 20% federal tax credit for qualifying film, television and visual effects productions made in the United States. The incentive could be combined with state programs, including California’s expanded film and television tax credit.
The bipartisan effort is being led in the Senate by Tim Scott of South Carolina and Adam Schiff of California, with House legislation introduced by Nathaniel Moran of Texas alongside lawmakers including Linda Sánchez and Laura Friedman of California and Brian Jack of Georgia.
Los Angeles Mayor Karen Bass welcomed the development after pushing for a federal incentive as part of a broader effort to restore production in Hollywood.
“Today, we’re seeing the results of the continued advocacy in Washington with the introduction of the federal film and television tax credit bill,” Bass said. “While I’ve worked aggressively with labor and entertainment industry leaders to expand state-level tax incentives and reduce filming fees locally, a federal tax credit is needed so local incentives remain competitive with countries who offer larger benefits that have drawn productions out of the United States.”
What The Federal Credit Would Do
The proposed federal program would provide a 20% credit on qualifying U.S. labor costs, including production crews and certain above-the-line expenses such as actors and writers. Post-production and visual effects work would also be eligible.
Additional incentives could raise the credit to as much as 30% for certain qualifying productions, including independent projects and productions filming in designated rural, opportunity or disaster areas. Eligible films and television projects generally would need budgets above $1 million, with at least 75% of principal photography taking place in the United States.
The significance for California is that the federal incentive could be stacked with the state program rather than replacing it. California increased its annual Film and Television Tax Credit Program to $750 million as the state attempts to compete not only with New York, Georgia and other domestic production centers, but with countries including the United Kingdom, Canada and Australia.
Where Hollywood Stands Now
Despite new incentives, Los Angeles has not yet returned to its former production levels.
FilmLA reported 4,711 on-location shoot days during the second quarter of 2026, down nearly 13% from the same quarter in 2025 and approximately 36% below the five-year average. Feature film production declined 20% year over year during the quarter, while television production fell approximately 30%.
There are, however, signs that California’s expanded incentive is beginning to generate activity. During its first fiscal year, California awarded credits to 170 projects projected to generate approximately $6.6 billion in production spending and nearly 35,000 cast and crew jobs in the state.
Los Angeles has also been working on the cost of filming itself. Under Mayor Bass’ Executive Directive 11, filming fees at Griffith Observatory have been reduced by 70%, the Central Library has reopened to production, permitting procedures have been streamlined at the Port of Los Angeles and LADOT, and filming has returned to the Sixth Street Bridge under a pilot program.
California recently added another piece to the equation. Governor Gavin Newsom signed legislation protecting the expanded state production incentive and creating California’s first post-production tax credit, aimed at keeping editing, visual effects, sound, music and other post-production jobs in the state.
Paramount And Warner Bros. Put Hollywood’s Future In Focus
The push to protect production jobs comes as Hollywood is also undergoing major consolidation.
Paramount Skydance’s proposed acquisition of Warner Bros. Discovery has become one of the largest and most closely watched transactions in the entertainment business. California Attorney General Rob Bonta and attorneys general from 11 other states reached a proposed settlement with Paramount this week that would resolve their antitrust challenge to the transaction.
Of particular importance to Hollywood, the proposed five-year agreement includes a commitment to spend at least $1.5 billion more on domestic film production, compared with 2025 levels, and requirements governing theatrical film output. It also provides that Paramount’s historic Melrose Avenue studio and the Warner Bros. lot in Burbank cannot be sold or closed during the agreement and must continue to operate in a manner consistent with past practices.
The merger is not completely over the finish line. On September 24, a federal judge declined to immediately approve the settlement with the states and requested additional information before ruling on the proposed consent decree.
The Paramount Warner Bros. situation underscores a larger issue facing Los Angeles. Keeping studio lots physically in Southern California is important, but the larger challenge is ensuring that the movies and television shows themselves continue to be made here, employing the crews, craftspeople and businesses that have supported Hollywood for generations.
A federal incentive would not guarantee that production returns to Los Angeles because every state would potentially benefit from it. California would still have to compete with other production centers on costs, incentives, infrastructure and ease of filming.
But combined with California’s expanded $750 million program, the new post-production incentive and Los Angeles’ efforts to reduce local barriers, the proposed federal credit would add another tool to the effort to keep American productions from leaving the country altogether.
For Hollywood, the next chapter may depend on whether those incentives translate into what matters most: cameras rolling, soundstages filling and crews getting back to work.
