Bipartisan Bill Seeks 30% Federal Film Credit to Halt Production Exodus

Key points

• The bill offers a 20% base credit on labor costs, with 5% bonuses for rural areas, independent productions, or disaster zones, capping the total at 30%.
• The Motion Picture Association estimates the incentive could add 143,000 jobs and increase production spending by $125 billion by 2035.
• IATSE, representing 170,000 workers, is urging Congress to pass the bill before the end of the year to prevent further job losses.
• The credit would apply to productions starting in taxable years after December 31, 2026, meaning it would likely impact projects beginning in 2027.
• The legislation stacks on top of existing state incentives, potentially making U.S. locations the most subsidized in the world.

Background

The U.S. film industry has faced a significant decline in domestic production over the last four years, with Los Angeles alone losing more than 50,000 jobs. This exodus has been driven by generous tax incentives in countries like the UK, Canada, and Spain. Previous attempts to address this issue at the federal level had stalled, but President Trump recently called on Congress to act 'immediately' to save the industry. The current proposal follows a two-year advocacy effort by Hollywood unions and the Motion Picture Association.

How outlets are covering it

Deadline reports that financiers at the Zurich Summit view the bill as 'hugely positive' but warn that it may take three to four years to fully realize its impact. Some executives, such as Andrea Scarso of IPR.VC, caution that increased incentives could lead to rising production costs, a trend seen in other foreign territories. Variety highlights the potential for the U.S. to become the 'best deal on the planet' for production if the federal credit stacks cleanly with state incentives. Conversely, IATSE emphasizes the urgency of passing the bill before the end of the year to secure jobs for its 170,000 members. International competitors, such as Manitoba’s film commissioner, suggest that currency exchange rates may still favor their territories despite the new U.S. incentive.

Why it matters

The passage of MPTERA could fundamentally reshape the global landscape of film and television production. By creating a competitive federal incentive, the U.S. aims to retain cultural influence and economic activity that has been migrating overseas. For workers and studios, the bill represents a potential return to domestic shoots, though the long-term impact depends on whether the incentive successfully offsets rising production costs and how quickly it is implemented.

What to watch

Congress must now vote on the MPTERA bill, with IATSE urging passage before the end of 2026. If passed, the credit would not apply to productions until taxable years after December 31, 2026. Industry observers will monitor whether the incentive leads to increased production budgets or if it successfully attracts projects back to the U.S. without triggering a price war among international competitors.