L.A. Production Slides in Q3 2026 Despite Record Tax Credit Usage

Key points

• FilmLA reported 4,171 on-location shoot days in Q3 2026, a 4.8% decrease from the same period last year and 29% below the five-year average.
• The California Film & Television Tax Credit Program now accounts for 40.3% of scripted on-location production, nearly double the share from a year ago.
• Television comedy saw a 143% surge in shoot days, driven largely by incentivized projects, while drama and reality TV continued to decline.
• Feature film shoot days rose marginally by 2.1%, but commercial production fell 15.9%, as commercials are not eligible for state tax credits.
• Los Angeles Mayor Karen Bass and FilmLA CEO Denise Gutches acknowledged the progress of the incentive program but emphasized that overall production levels remain insufficient for the local economy.

Background

California expanded its film and television tax credit cap from $330 million to $750 million annually in 2025, with the new program taking effect in July 2025. This expansion was intended to reverse a multi-year decline in local production. Recent months have seen mixed results, with some productions like 'Tracker' relocating to Los Angeles due to incentives, while others like 'American Idol' moved to Atlanta due to California's restrictive eligibility rules for unscripted content.

How outlets are covering it

Deadline and The Hollywood Reporter both highlight the continued overall decline in shoot days despite the tax credit expansion, noting that the incentive program is not enough to offset broader industry trends. The Los Angeles Times emphasizes the positive impact of the tax credit on specific genres, particularly comedy, and the return of titles like 'Tracker' to Los Angeles. Variety focuses on the political implications, noting that Mayor Karen Bass is calling for an uncapped tax credit, while her opponent, Nithya Raman, has criticized her for not doing more to support the industry. All sources agree that the tax credit program is successfully attracting individual productions, but they differ on whether this is enough to reverse the overall decline in Los Angeles production.

Why it matters

The continued decline in Los Angeles production, despite significant state investment, highlights the challenges facing the local film and television industry. The success of the tax credit program in attracting specific titles does not translate to a broad-based recovery, suggesting that other factors, such as competition from other states and countries, are driving the decline. This has significant implications for the local economy, as the film and television industry is a major employer in Los Angeles.

What to watch

Los Angeles officials are expected to continue pushing for further changes to the tax credit program, including an uncapped credit and broader eligibility for above-the-line costs. The industry will be watching to see if these changes can reverse the decline in production, or if Los Angeles will continue to lose productions to other states and countries.