Trump Backs A Federal Film And Television Tax Credit

What A Film And Television Tax Credit Actually Does

A film and television tax credit is a subsidy that reimburses a portion of a production’s qualified in-state spending, including crew wages, equipment rentals, and purchases from local vendors. These incentives can take many forms like a transferable tax credit (Georgia) or a direct cash grant awarded through an application process (North Carolina).

Like corporate investments or athletic teams, the film and television industry attempts to find savings on their costs for shooting their film in a specific location. As films and television shows can be shot almost anywhere, the mobility leads some locations to offer more incentives to come to their state, which, in turn can help boost the economy. While many localities offer these incentives, the states of North Carolina and Georgia have capitalized on this most notably with a treasure trove of films like Hunger Games, The Avengers, and television shows like One Tree Hill and the Walking Dead.

Even though the studio headquarters still call California home, the number of large and important projects seem to have moved elsewhere.

What Trump Is Proposing For A Federal Film And Television Tax Credit

President Trump has decided to enter into this discussion on Truth Social, calling Hollywood “a Complete and Total Disaster” and urged Congress to “approve, immediately, a Federal Production Incentive to create Entertainment Jobs in America.” The proposal delivered to Trump by Voight and Paul called for “significant changes” to the tax code to increase the incentives for filming within the U.S. and that he expects bipartisan support for this legislation.

This rhetoric against the film industry is not new. In May of 2025, Trump directed trade officials to impose a 100% tariff on films produced overseas, a threat that was renewed in September of 2025 and has appeared to have stalled since. This latest call for tax-related changes to the film and television industry represents an opposite approach – rather than using a stick (i.e., a tariff) to scare film and television productions back into the U.S., Trump is calling for Congress to offer a carrot (i.e., a tax credit) to change locations in the same way that North Carolina and Georgia have found success.

As noted by Politico, the idea already has significant Congressional support as well as support among lobbying groups like the Motion Picture Association. Senator Adam Schiff (D-CA) and Representative Laura Friedman (D-CA), have pushed for a federal credit for years, arguing that state programs alone cannot compete with the significant incentives offered by other countries like Canada and the United Kingdom. As this spending has recently traveled overseas, Trump seeks to secure the U.S.’s position as a top film and television producer using these potential tax credits.

What Happens If The Federal Film And Television Tax Credit Passes

The proposed legislation is far from being passed. However, one can quickly point to the benefits of shooting film and television shows within the U.S. as a key driver. The costs to shoot these productions can be tremendous, and as film and television shows leave the U.S. to go overseas, so do those expenses, costing the U.S. significant tax revenues. While a tax credit would cost the U.S. some cash inflows, if the credit is set at the right amount, it could still yield a significant cash inflow.

However, there are other reasons why the U.S. might benefit from bringing the film and television productions back onshore. These reasons can range from preventing a foreign influence in our films all the way to stifling competition among U.S. states and their race to the bottom approach to U.S.-based tax incentives.

Despite these benefits, a federal tax credit for film and television show production could create financial problems. In a state like Georgia, which offers transferable tax credits, 97% are sold to other taxpayers, rather than used directly by the production company. Any taxpayer can buy this tax credit, and, according to Variety, these tax credits often up in the hands of Georgia-based corporations and wealthy individuals.

The state income tax revenue implications add another layer worth considering. New production activity generates tax revenues based on cast and crew wages. States like North Carolina and Georgia have found these revenues can be meaningful, but a federal credit stacked on top of state incentives can just as easily accelerate the bidding war between states (rather than cool it). This is because a federal baseline gives states less room to differentiate themselves without layering their own incentives on top. North Carolina’s recent decision to nearly triple its per-project caps suggests that competitive pressure among the states is not going away just because the Federal government enters the arena. If anything, a federal floor could raise the ante at every level of government simultaneously.

Furthermore, if the film and television show was planning to shoot in the U.S. anyway, then the tax credit would not be beneficial at all. Instead, it would represent tax revenues forgone that would have otherwise been collected.

What’s On The Horizon For A Federal Film And Television Tax Credit

For now, the proposed film and television tax credit is nothing more than a social media post and White House meeting. Put differently, proposed legislation and turning it into law will require Congress to draft statutory language defining qualified spending, setting a credit rate and cap, and deciding how the legislation can interact with the numerous state and local tax incentives already in place. However, if the bipartisan support is actually there, then there is significant lobbying efforts that can help make this call via social media a reality. Thus, it remains to be seen whether this proposed actions ends up being a win for productions based in the U.S., or if it ends up being new version of the same revenue leakage that states have already struggled to grapple with.