Hollywood's 20% tax credit bid could add $250B to US film economy

On Tuesday, the U.S. Film & TV Production Coalition announced its launch, uniting studios, unions, guilds and industry groups around a proposed federal tax incentive.

The coalition’s goal is to secure a 20 percent transferable tax credit that could be stacked onto existing state benefits to keep American productions from moving overseas.

A new study by consultancy Olsberg SPI, commissioned by the Motion Picture Association, claims the credit could add $250 billion in gross economic value and support an average of 143,500 full‑time jobs annually through 2035.

The study’s findings will be unveiled at a press conference where MPA chairman and CEO Charles Rivkin is set to speak. Representatives from Congress, the Directors Guild of America, IATSE, the International Brotherhood of Teamsters and SAG‑AFTRA are expected to join him.

“Every production that goes overseas takes electricians, carpenters, drivers, and small business revenue with it,” Rep. Laura Friedman told reporters; “a national film tax credit is a commonsense, bipartisan fix.”

## Historical Context

The idea of a federal film tax incentive is not new. In the 1970s, the American Film Institute first advocated for a national program to support domestic filmmaking. The first concrete step came in 1984 when California’s Production Incentive Program was launched, offering a 20 percent tax credit on qualified expenditures.

Over the next two decades, the model spread: New York, Georgia, and Texas followed suit, each tailoring the program to local economic conditions. By the early 2000s, a patchwork of state credits had become a major driver of where productions chose to film.

However, as global production centers grew more attractive—thanks to lower labor costs and generous tax breaks in Canada, the United Kingdom, and parts of Eastern Europe—American studios began to feel the pull.

The 2014–15 period saw a 15 percent decline in U.S. domestic production spending, and by 2020, the share of U.S. productions that remained on home soil had slipped below 50 percent for films and 40 percent for television.

The coalition’s proposal is an attempt to reverse that trend by creating a unified national incentive that could compete with overseas subsidies while still allowing states to layer their own credits on top. The aim is not to eliminate state programs but to provide a consistent baseline that all producers can rely on.

## What the Coalition Is Aiming For

The coalition brings together a broad spectrum of industry stakeholders.

Its members include Jon Voight, the Directors Guild of America, the Producers Guild of America, SAG‑AFTRA, the Writers Guild of America West and East, IATSE, the International Brotherhood of Teamsters, the Association of Talent Agents, CreativeFuture, Coalition for American Production, FilmUSA, Future Film Coalition, Independent Film & Television Alliance, Laborers International Union of North America, MPA, National Association of Voice Actors, NCTA – The Internet and Television Association, Producers United and the Television Academy.

The core proposal is a 20 percent transferable tax credit on qualifying expenditures. Proponents argue that making the credit transferable will attract independent producers who may have cash flow constraints but possess high‑quality projects.

The plan also calls for an additional 5 percent uplift for labor costs incurred in FEMA‑declared disaster areas and for independent production companies. A minimum spend threshold of $1 million is set to filter out very small projects that could skew the incentive’s effectiveness.

The coalition believes that a federal credit would not only protect existing jobs but also create new opportunities in underserved regions.

By encouraging productions to locate in rural or economically distressed areas, the program could spur ancillary spending—from local hotels and restaurants to transportation and set construction—helping to build sustainable creative economies across the country.

## Economic Impact

The Olsberg SPI study projects that a 20 percent credit would generate $249.1 billion in total gross value‑added from 2027 to 2035. It also estimates an average of 143,500 full‑time equivalent jobs supported annually across the United States.

Additional projections include $133.1 billion in total labor income and $125.3 billion in extra production expenditures over the same period.

The analysis assumes the U.S. share of global production climbs to 65 percent, reaching that level by 2030 for film and 2032 for television, and maintaining it thereafter. Without the incentive, the study predicts a gradual decline in location share, reaching 25 percent for film and 29 percent for television by 2035.

The credit is expected to attract both domestic and international productions, potentially drawing foreign businesses back to U.S. soil.

Industry analysts suggest that the credit could also influence the structure of production deals. With a predictable 20 percent return on investment, producers might feel more comfortable committing to larger budgets, leading to higher‑quality output and increased global competitiveness for American content.

## Fan Reaction

Fans across the country have reacted with enthusiasm.

A trending thread on a popular fan forum reported that “the movies we love will stay made in America.” A handful of users shared screenshots of their local businesses receiving extra patronage during recent film shoots, noting the boost in sales for coffee shops, diners and craft stores.

One fan who lives in a small town that recently hosted a blockbuster shoot wrote: *“Seeing the crew in my town felt like a reminder that our community is part of something bigger.”*

Social media also saw an uptick in hashtags like #KeepHollywoodHome and #AmericanFilmFuture, with many users expressing pride in seeing American stories told by American hands.

While some critics argue that the economic benefits could be unevenly distributed, the general sentiment among fans leans toward support for a national incentive that keeps film production within U.S. borders.

## Industry Impact Beyond Jobs

Beyond headline job figures, the proposed credit could reshape the creative pipeline. The availability of a federal incentive would lower financial barriers for emerging filmmakers and independent studios, potentially diversifying the voices that get funded.

A 2021 report from the Independent Filmmaker Project noted that independent productions often struggle to secure financing beyond initial seed capital; a reliable federal credit could help bridge that gap.

the credit could strengthen local economies by encouraging productions to partner with regional service providers. The Olsberg SPI study estimates that every $1 million of production spending generates roughly $3.50 in additional local economic activity.

Thus, the projected 143,500 jobs would translate into millions of dollars flowing through small businesses, from catering and transportation to set construction and post‑production services.

Another significant impact lies in the talent pipeline. With more productions staying in the U.S., apprenticeships and training programs—such as those offered by IATSE and SAG‑AFTRA—could see increased enrollment.

This, in turn, ensures a steady supply of skilled crew members who can meet the demands of modern productions, which often require specialized technicians for visual effects, sound design, and digital editing.

## Legislative Path and Current Status

Draft legislation is currently being prepared to implement the proposed credit. Its introduction has been delayed by the approaching end of the legislative session before the midterm elections, raising concerns about timing. Nonetheless, bipartisan support has been voiced by several lawmakers.

Rep. Brian Jack (R‑GA) and Rep. Laura Friedman (D‑CA) are among those publicly urging Congress to act.

President Donald Trump publicly backed the measure in August after a meeting with his Hollywood ambassador, Jon Voight. The Trump administration has called on Republicans and Democrats to unite behind the incentive. “America should be producing American movies,” Teamsters leader Sean M.

O’Brien said; “the Teamsters will aggressively support legislation that works for American workers.”

The coalition’s launch underscores a growing sense that federal backing is needed to keep productions from leaving the country. As the study’s findings are set to be released, industry leaders and lawmakers alike are watching closely to see whether the proposed tax credit will become law before the midterm.

In a sector where every dollar spent translates into jobs for thousands of crew members, set builders, drivers and caterers, the stakes remain high.

The coalition’s unified call for a federal incentive signals a concerted effort to shape the future of American film and television production, ensuring that storytelling continues to thrive on home soil while sustaining the economic health of communities across the nation.