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California Sees $6 Billion in Direct Spending From Incentives

California’s expanded production tax incentive program has resulted in nearly $6 billion in in-state spending over the past three years, a report released Friday showed.

The California Film Commission asserted in the report that the Film & TV Tax Credit Program 2.0 has led to sustained growth in retaining and attracting in-state production. The $6 billion figure was generated from $815 million in tax credits. California’s credit covers up to 25% of in-state production costs, which is not as lucrative as other locations but is aimed at putting the brakes on runaway production.

The $6 billion figure includes $2.25 billion in qualified wages and $1.89 billion in qualified vendor expenditures, along with $1.85 billion in other expenditures that do not qualify for tax credits. Collectively, productions that have been allocated tax credits under Program 2.0 are on track to employ more than 18,000 cast and 29,000 crew members, according to the report.

“Today’s report shows that Program 2.0 is working over the long-term to create high-quality production jobs and increase production spending in California,” said California Film Commission executive director Amy Lemisch. “While our tax credit is far more targeted than most, it does precisely what it was designed to do by keeping us competitive and reminding the industry that California has everything needed to provide the best value.”

The report showed a 15.6% increase in hours worked in-state by below-the-line crew members in 2017 compared to 2014 (the year before Program 2.0 began). The report also showed that during year three of Program 2.0, California attracted five additional big-budget films (“Call of the Wild,” “Captain Marvel,” “Ford v. Ferrari,” “Island Plaza” and “Once Upon a Time in Hollywood”). To date, the expanded tax credit has attracted a total of 10 big-budget films.

During the third year, California attracted two additional relocating TV series (NBC’s “Timeless” from Vancouver, and Amazon Studios’ “Sneaky Pete” from New York). To date, the expanded tax credit program has gained a total of 15 relocating TV series from across the U.S. and Canada.

The report comes four months after California Gov. Jerry Brown signed an extension of California’s production tax credit program for five years beyond its 2020 expiration with $1.6 billion in credits.

The program was more than tripled in size in 2014 to $330 million annually to compete effectively with incentives in New York and Georgia. The program is overseen by the California Film Commission, which selects the TV and movie projects to qualify partly based on the number of jobs created.

The commission announced on July 23 that Margot Robbie’s Harley Quinn spinoff, “Birds of Prey,” would receive a $12.6 million tax credit for filming in California. “Birds of Prey,” a Warner Bros. movie, received the largest allocation of 19 films totaling $52.2 million.

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