Bipartisan Coalition Unveils Federal Film Tax Credit to Reverse Hollywood Exodus

Key points

• Sen. Tim Scott (R-SC) and Rep. Nathaniel Moran (R-TX) introduced the legislation in the Senate and House, respectively, with key support from Sen. Adam Schiff (D-CA) and Rep. Laura Friedman (D-CA).
• The bill creates a transferable federal tax credit of 20% for U.S.-resident labor costs, with a maximum of 30% for productions in rural or disaster areas, and requires at least 75% of principal photography to occur in the U.S.
• A Motion Picture Association report projects the incentive would lead to $125.3 billion in additional U.S. production spending and 143,500 new jobs between 2027 and 2035.
• President Trump, who has called the current state of Hollywood a 'disaster,' has pushed for the credit, which he named the Motion Picture, Television, and Entertainment Revitalization Act.
• The federal credit is designed to stack with existing state incentives, such as California's $750 million program, to make U.S. locations more competitive than countries like Canada and the UK.
• Some conservative lawmakers, including Rep. Rich McCormick (R-GA), have expressed concerns about the cost of the incentive amid high deficit spending, though they acknowledge the benefits for film-producing states like Georgia.

Background

The push for a federal incentive follows years of production shifting to countries with more lucrative tax credits, leading to significant job losses in the U.S., particularly in Los Angeles, which lost over 42,000 film and TV jobs between 2022 and 2024. In August 2026, President Trump publicly urged Congress to act, and in September, he endorsed the bipartisan effort. California had recently expanded its own state tax credit program to $750 million annually to compete, but the federal measure aims to provide a nationwide baseline to match international competitors.

How outlets are covering it

While all sources agree on the bill's introduction and its bipartisan nature, they highlight different aspects of the debate. POLITICO emphasizes the political coalition, including the unlikely support from Trump and Jon Voight, and the potential for the bill to pass in the lame-duck session. Deadline focuses on the legislative mechanics, noting the 20% credit and the stacking with state incentives, while also highlighting criticism from the Wall Street Journal calling it a 'handout.' The Ankler provides a unique angle by linking the federal credit to the Paramount-Warner Bros. Discovery merger settlement, with California Attorney General Rob Bonta suggesting the federal credit could increase U.S. production from 5% to 40% of global theatrical film. Baton Rouge Business Report highlights the support from Louisiana's film industry, underscoring the broad appeal of the incentive across different states.

Why it matters

The federal tax credit could be a turning point for the U.S. entertainment industry, potentially reversing the trend of productions moving overseas and creating significant economic benefits, including new jobs and increased spending. It also reflects a broader political consensus on the importance of the entertainment sector, despite concerns about the cost of the incentive. The bill's success could influence future state-level incentives and the overall competitiveness of the U.S. in the global film and TV market.

What to watch

The bill is expected to be pushed through Congress during the lame-duck session after the November midterms. The next steps will involve negotiations on the specific details of the credit, including the percentage and the bonuses, and addressing concerns from conservatives about the cost. The industry will also be watching for any potential opposition from lawmakers who are wary of new tax breaks, particularly in a time of high deficit spending.