L.A. Film Production Hits New Lows Despite Record Tax Credits

Key points

• FilmLA reported 4,171 on-location shoot days in Q3 2026, a 4.8% year-over-year drop and 11.5% decline from Q2.
• California’s tax credit program, expanded to $750 million annually, now accounts for 40.2% of scripted on-location production, nearly double the previous year’s share.
• TV comedy shoot days surged 143% to 192 days, driven by incentivized projects, while drama fell 9.4% to 494 days.
• Commercial production, ineligible for tax credits, dropped 15.9% to 562 shoot days, remaining 41% below its five-year average.
• Mayor Karen Bass called for an uncapped state tax credit and a federal film tax credit to reverse the production decline.

Background

California expanded its film and television tax credit from $330 million to $750 million annually in 2025, broadening eligibility to more production types. This move followed years of declining production levels in Los Angeles as other states and countries competed for Hollywood projects. The expansion was intended to reverse the trend, but production levels have continued to fall in subsequent quarters.

How outlets are covering it

The Hollywood Reporter and Variety emphasize that despite the tax credit expansion, overall production remains far below five-year averages, with FilmLA CEO Denise Gutches stating crews are feeling the impact. The Los Angeles Times highlights that incentivized projects are making up a growing share of local shoot days, with 23% of TV shoot days now incentivized, up from 9% a year earlier. Deadline notes that while the tax credit is propping up much of the remaining production, it is not enough to reverse the overall decline, and soundstage occupancy remains far below levels from a decade ago. All outlets agree that the tax credit is helping individual productions but not reversing the broader downturn in Los Angeles production.

Why it matters

The continued decline in Los Angeles film production despite significant tax incentives signals a structural shift in the industry, with productions increasingly moving to other states and countries. This trend threatens the livelihoods of local crews and businesses, prompting calls for further policy changes, including uncapped tax credits and federal incentives, to retain production in California.

What to watch

Mayor Karen Bass is pushing for an uncapped California film and television tax credit and a federal film tax credit. The next steps will likely involve legislative debates on these proposals and continued monitoring of production levels to assess the effectiveness of current incentives.