California lawmakers have introduced Senate Bill 630, aiming to revitalize the state’s animation industry by offering a 35% tax credit to qualifying animated productions. The bill targets animated features, series, and shorts produced in California with a minimum production budget of $1 million.
Historically, California’s film and television tax credits have predominantly benefited live-action projects. The proposed legislation seeks to address this imbalance by including animation, an industry that has seen significant production migrate to countries offering generous subsidies and states like Georgia. This initiative aligns with Governor Gavin Newsom’s October 2024 proposal to expand California’s Film & Television Tax Credit Program from $330 million to $750 million annually. The expansion aims to bolster the state’s entertainment sector, which has generated over $26 billion in economic activity and supported nearly 200,000 jobs since 2009.
Despite these efforts, overall film production in Los Angeles experienced a 30% decline in 2024 compared to the five-year average. The inclusion of animation in the tax credit program is seen as a strategic move to reverse this trend and stimulate in-state production.
As the California legislature debates Senate Bill 630, the final budget for the 2025-2026 fiscal year remains under negotiation. The outcome will determine the extent to which these proposed incentives can influence the state’s animation industry.
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