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California lawmakers propose new perks for film and TV tax credits to counter budget caps

A trailer bill introduced days before the legislative deadline aims to accelerate refund monetization and exempt indie projects from business tax caps.

Updated Aug 29, 2026 · 03:22 UTC1 reports

The short version

  • California Assemblymember Rick Chavez Zbur and Senator Ben Allen introduced AB/SB 186 to revise the state's film and television tax credit program.
  • The bill exempts indie productions from business tax credit caps, speeds up refund monetization from five years to two, increases refund caps from 90 to 95 percent, and extends credit expiration dates.
  • The measure aims to offset a June state budget law that permanently capped business tax credit usage over $5 million starting in 2030, which industry groups argued threatened a previous $750 million program expansion.
  • Lawmakers face an August 31 deadline to pass the bill before the current legislative session adjourns.

Key facts

  • State Assemblymember Rick Chavez Zbur and Senator Ben Allen introduced trailer bill AB/SB 186 on Friday.[The Hollywood Reporter]
  • The proposal allows productions to monetize 95 percent of their tax credit refund over two years, compared to the current 90 percent over five years.[The Hollywood Reporter]
  • AB/SB 186 exempts independent projects from state business tax credit caps and extends the use period for recently awarded credits from nine to 15 years.[The Hollywood Reporter]
  • A state budget bill signed on June 29 permanently capped the use of business tax credits over $5 million a year starting in 2030.[The Hollywood Reporter]
  • The Motion Picture Association, the Entertainment Union Coalition, and the Producers Guild of America support the new trailer bill.[The Hollywood Reporter]
  • As of August 14, industry members had sent roughly 350,000 letters to California legislators protesting the inclusion of entertainment credits in the business tax credit caps.[The Hollywood Reporter]

What remains uncertain

  • It is uncertain whether the state legislature will vote to pass AB/SB 186 before the legislative session adjourns on August 31.[The Hollywood Reporter]
  • Industry stakeholders expressed concern that recent state policy changes may still harm long-term confidence among production companies despite the proposed adjustments.[The Hollywood Reporter]

Sources