$10 Million in Funding Earmarked for CA Postproduction Tax Credit If Gov. Newsom Signs

If Governor Gavin Newsom decides to sign a bill attempting to lure more postproduction work to California, $10 million has been earmarked to launch the effort, The Hollywood Reporter has learned.

The news arrives after SB 2319, a bill aiming to support post work on projects that currently aren’t incentivized by California, passed the state legislature on Sunday. The state Senate voted to advance the bill, carried by Assemblymember Nick Schultz, with 65 members in support and two in opposition.

The legislation aims to complement existing support in California for postproduction. Projects that shoot in the state are already eligible to receive tax credits for this stage of the filmmaking process, but SB 2319 would open up qualification to projects that don‘t complete their physical production in California or don‘t receive production tax credits in the state. Movies and TV shows that locate work including editing, VFX, sound mixing and scoring in California would receive a 35 percent base tax credit if the bill is signed into law.

Though it remains a tight budget year for California, $10 million would be allocated to support the postproduction tax credit if Newsom signs on, Assemblymember Schultz told THR on Monday.

Though the bill doesn‘t include a specific line item for funding, the legislature’s end of session budget proposal sets aside $10 million to fund the startup costs of the program if Gov. Newsom signs on. That‘s a far cry from the $100 million that Schultz originally proposed for the program but, the legislator says, it would offer a “good starting point.”

“We understand it’s a harsh economic climate, the state has limited resources in its budget, we obviously have a lot of priorities right now with everything we’re encountering from the federal administration,“ said Schultz. “So while $10 million may not be enough, it is a good starting point, it would prop up and start the program. My commitment would be to come back in January and renew that push for additional funding [and] it might take a few efforts, but get that funding where it needs to be.”

The governor has until the end of September to decide if he wants to sign SB 2319 into law.

The grassroots group the California Post Alliance (CAPA) has been spearheading efforts to get the bill passed for months. The legislation also has the support of the California IATSE Council, the Motion Picture Editors Guild, Netflix, Apple, Warner Bros. Discovery, Sony Pictures Entertainment, Universal Music Group and SAG-AFTRA.

In a statement, CAPA said, “The California Post Alliance (CAPA) was formed to shine a light on the challenges facing California’s post-production community, and the passage of AB 2319 is a powerful testament that our legislators are listening.“ The organization added, “We are deeply grateful to Assemblymember Nick Schultz for his commitment to and leadership on this bill, to his staff and our co-sponsors MPEG Local 700, as well as all of the industry advocates who helped bring us to this historic moment.