California Invests $342M in Film Tax Credits, Luring Big Productions

California has allocated $342 million in tax credits to stimulate the production of large-scale films within the state. This significant investment aims to counter a recent downturn in industry jobs and attract major Hollywood projects back to California. Among the beneficiaries are highly anticipated sequels and new projects from acclaimed filmmakers.

The next installment in the popular Jumanji franchise will receive a record $43.9 million in tax credits. The film, the fourth overall in the series and third since 2017, is scheduled to begin shooting in November and is slated for a December 2026 release. Director Jake Kasdan expressed his enthusiasm, stating, "I have long looked forward to the day when the California Film Incentive would help us bring movies like this one back home and now that it does, I am so grateful that ours will be among the first to take advantage of the new program." He emphasized the importance of California's skilled workforce for such productions.

Michael Mann's highly anticipated film, Heat 2, is set to receive $37.2 million in tax credits. Additionally, the Oscar-winning directing duo known as the Daniels, creators of "Everything Everywhere All at Once," will benefit from $38.4 million for their next project with Universal. This film's allocation saw a substantial increase due to the expansion of the state's incentive program, adding nearly $18 million to its initial approval. According to the California Film Commission, the Daniels' project initially withdrew from the program and reapplied, leading to an increased coverage of qualified expenses from 19.5% to 35.8%.

Governor Gavin Newsom signed a significant expansion of the tax credit program in June, a move designed to address a 29% drop in production jobs since 2022. The expanded program will provide $337 million annually for feature films and $412 million for television shows over the next five years. This initiative comes as California faces increased competition from other states like Georgia, New Jersey, and New York, as well as international locations such as the U.K. and Canada, which also offer substantial subsidies to attract film productions.

Prior to the program's expansion on July 1, the maximum tax credit for any single project was $25 million, with most limited to $20 million. The new system has raised this cap to $48 million. In July, the California Film Commission also awarded $42.8 million to a new Hulu series from Dan Fogelman. Other notable feature film projects receiving allocations include Blumhouse's "Sunday" ($16.4 million), Netflix's "The Fifth Wheel" ($14.8 million), and Warner Bros.' "Untitled Family Drama" ($39.6 million).