Podcast Summary: The Town with Matthew Belloni

Episode Title: After a Historic Hollywood Tax Break, Is Moviemaking Coming Back to California?
Host: Matt Bellany
Release Date: July 9, 2025
Source: The Ringer

Introduction

In this episode of The Town with Matthew Belloni, host Matt Bellany delves into California's newly enhanced tax incentives aimed at revitalizing moviemaking within the state. As Hollywood faces a persistent exodus to states like Georgia and New York, California's recent legislative moves signal a strategic push to retain and attract film and television productions.

California's Enhanced Tax Incentive Package

California has significantly overhauled its tax incentive program to make the Golden State more competitive in the national film production landscape.

• Increased Funding Cap: The annual incentive cap has been more than doubled from $330 million to $750 million, making it one of the most substantial programs in the country.

  Joe Quianese (SVP of Incentives, Entertainment Partners) [04:47]: "They've made some pretty bold moves in terms of increasing the funding. The annual funding to $750 million a year, that's more than double than it was before."

• Higher Base Credit Rates: The base credit for productions has risen from 20% to 35%, with relocations eligible for up to a 40% credit.

  Joe Quianese [05:28]: “So a $100 million movie, the base credit, assuming it's all labor, they would get back a $35 million credit.”

• Expanded Eligibility: The new legislation includes animation and competitive series, broadening the types of productions that can benefit. However, reality TV remains excluded.

  Joe Quianese [06:44]: "And we've got animation now, competition shows qualify, and TV less than 30 minutes, but unfortunately no reality."

• Refundable Tax Credits: For the first time, California offers refundable tax credits, allowing producers without significant tax liabilities to benefit from the incentives.

  Joe Quianese [12:29]: “It's now refundable. Unless you have an income tax or a sales tax liability, you can elect to get that credit back, albeit at 90%, spread over five years.”

Expert Insights: Interview with Joe Quianese

Matt Bellany welcomes Joe Quianese, SVP of Incentives at Entertainment Partners, to dissect the implications of California's new tax incentives.

Impact on Production Location Choices

Quianese emphasizes that while California's package is generous, it still faces stiff competition from other states and countries offering more lucrative incentives.

Joe Quianese [05:23]: "They've made some pretty bold moves... pretty close to one of the highest in the country."

However, he acknowledges key limitations, notably the exclusion of above-the-line (ATL) costs such as actor salaries, which are often substantial in major productions.

Joe Quianese [07:17]: "So if you're producing unscripted content, it wouldn't qualify."

Comparison with Other Jurisdictions

• New York: Recently enhanced its own incentive program, allowing similar ATL credits and offering quick reimbursement timelines, making it a formidable competitor.

  Joe Quianese [10:26]: “New York now has an Empire State Independent Film credit where you can also get between 30 and 40% with all your ATL qualifying.”

• United Kingdom and Canada: Both offer high percentage credits with fewer restrictions, such as participation payments in the UK and combined federal and provincial incentives in Canada that can exceed 40-50%.

  Joe Quianese [25:09]: "Canada offers great federal and provincial incentives... can give a producer in excess of 40 to 50% back on every dollar they're spending."

• Georgia and Texas: Continue to offer competitive programs without annual caps, attracting a significant number of productions.

  Joe Quianese [12:36]: "Georgia still offers a very competitive program... Texas is aggressively getting into the game as well."

Future Prospects and Challenges

Quianese remains cautiously optimistic but realistic about the potential for California to reverse decades of production migration.

Joe Quianese [26:04]: "Given the fact that we've doubled the amount of money... we should see... increased jobs because there's obviously going to be increased production spend in the state."

However, he concedes that competing with the UK's comprehensive incentives remains a significant hurdle.

Joe Quianese [27:17]: “It's hard to compete with the UK given they're offering a base credit of 25.5%, as high as 40%.”

Industry Reactions and Expectations

Matt and his guest discuss the industry's reception to the new incentives. While some in the industry are hopeful, others remain skeptical about whether these measures will be sufficient to stem the tide of productions moving elsewhere.

Matt Bellany [19:54]: “On this state, I know it's a reality situation... but you're looking at an exodus of these jobs and these producers where other states are not saying that.”

Additionally, the discussion touches on the operational aspects of the incentive program, such as application processes emphasizing job creation and accurate budgeting to prevent misuse.

Joe Quianese [14:05]: “There's an application window... projects that show they're going to create or maintain the largest percentage of jobs have a higher percentage of being selected.”

Broader Implications for Hollywood and Content Creation

The episode explores how these incentives might influence not just traditional film and television but also newer content forms like short-form videos.

Joe Quianese [23:28]: “One thing I do want to highlight... as long as 75% or more of the product project is shot in the state and it's a million dollars or more spend, it should qualify.”

However, unscripted and certain digital content still fall outside the eligible categories, limiting the scope.

Conclusion and Future Outlook

As California ramps up its efforts to reclaim its position as the heart of moviemaking, the effectiveness of these new tax incentives remains to be seen. With significant investments now in place and a more inclusive approach to different types of productions, there's potential for a resurgence. However, entrenched competition from other states and countries with more aggressive incentives poses ongoing challenges.

Matt Bellany [26:57]: “I don't see Marvel moving back from Georgia... the infrastructure is so strong there.”

The episode underscores a pivotal moment for Hollywood, where strategic policy changes in California might influence the future landscape of film and television production in the United States.

Notable Quotes:

• Joe Quianese [05:28]: “So a $100 million movie, the base credit, assuming it's all labor, they would get back a $35 million credit.”

• Joe Quianese [12:29]: “It's now refundable. Unless you have an income tax or a sales tax liability, you can elect to get that credit back, albeit at 90%, spread over five years.”

• Matt Bellany [19:54]: “On this state, I know it's a reality situation... but you're looking at an exodus of these jobs and these producers where other states are not saying that.”

• Joe Quianese [26:04]: “Given the fact that we've doubled the amount of money... we should see... increased jobs because there's obviously going to be increased production spend in the state.”

Tags: #Hollywood #TaxIncentives #California #FilmProduction #EntertainmentIndustry #MatthewBelloni #TheRinger #MovieMaking #EconomicPolicy