Bipartisan Lawmakers Introduce Federal Film Incentive to Counter Global Subsidies

Key points

• The legislation creates a 20% federal tax credit for U.S. labor costs in film and TV productions exceeding $1 million, with 75% of principal photography in the U.S.
• The credit can rise to 30% through 5% bonuses for filming in rural opportunity zones, federally declared disaster areas, or for independent productions.
• The federal credit is designed to stack with state tax incentives, such as California’s 35-45% credit, to create a combined package that competes with international subsidies.
• The bill excludes news, live sports, talk shows, daytime dramas, social media content, advertising, and corporate videos from eligibility.
• Proponents, including Sen. Tim Scott and Sen. Adam Schiff, argue the incentive will create 143,500 jobs and double the $20 billion U.S. film and TV industry by 2032.
• The proposal faces potential opposition from conservatives concerned about deficit spending and the cost of subsidies, as well as questions about its impact on countries like Canada and the UK.

Background

The push for a federal film incentive has been ongoing since 2025, with Rep. Laura Friedman drafting early versions and recruiting bipartisan support. President Trump endorsed the measure in August 2026, urging Congress to act 'immediately' to save the industry. The proposal follows a historic slump in production that cost over 50,000 jobs in Los Angeles alone between 2022 and 2024. The Motion Picture Association released a study in September 2026 projecting that a federal incentive would generate $125.3 billion in additional U.S. production spending from 2027 to 2035. The bill also follows a period of intense debate over state incentives, with California increasing its program to $750 million annually in 2025, and international competitors like Manitoba offering credits as high as 65%.

How outlets are covering it

Variety emphasizes the potential for the U.S. to become the 'best deal on the planet' for production, highlighting the stacking of federal and state credits. Deadline focuses on the legislative details, including the bill’s name, eligibility criteria, and the involvement of Trump and Jon Voight, while noting the challenges of passing the bill during the lame-duck session. Politico highlights the bipartisan nature of the support, the role of Trump in driving momentum, and the potential opposition from conservatives concerned about the cost of the incentive. All three sources agree on the core details of the bill but differ in their emphasis on the political dynamics and the potential impact on international competitors.

Why it matters

The introduction of a federal film incentive marks a significant shift in U.S. policy, aiming to reverse the trend of production moving overseas due to more generous subsidies in other countries. If passed, the bill could have a substantial impact on the U.S. entertainment industry, creating jobs and increasing production spending. It also reflects a broader trend of government support for industries deemed important to the national economy, similar to subsidies for semiconductors and energy. The bill’s success or failure will influence the future of U.S. film and TV production and its global competitiveness.

What to watch

Lawmakers aim to pass the bill during the lame-duck session after the November 2026 midterm elections, possibly by attaching it to a major funding bill. The bill’s progress will depend on the ability to overcome opposition from conservatives concerned about the cost of the incentive and the potential impact on international competitors. The Motion Picture Association and industry unions will continue to advocate for the bill, while international competitors like Canada and the UK may respond with their own measures to protect their industries.