California is introducing new tax incentives to retain and attract post-production work and associated jobs to the state. Governor Gavin Newsom signed Bill AB 2319 on 19 September. The new scheme initially provides for an annual allocation of ten million dollars for tax credits on eligible post-production expenditure.

Funding is available in particular for work in the fields of editing and visual effects (VFX). The underlying production does not need to have been carried out entirely in California. This is intended to close a gap in the state’s existing film and TV tax incentive scheme.

The Californian production incentive scheme was expanded last year to $750 million and, in principle, also covers post-production costs. However, the requirement to date has been that at least 75 per cent of the production budget must be spent in California. AB 2319 now allows tax incentives to be granted for post-production services in California, even if the actual filming took place outside the state.

Another aspect of the new model concerns employment conditions. 85 per cent of the funding must be used for jobs that provide wages and social benefits at trade union levels.

According to Nick Schultz, the MP leading the initiative, the Californian post-production industry employs around 12,000 people. However, just under 2,000 jobs have been lost over the past two decades. The new incentive is intended to make California a more attractive location for post-production once again.

This measure also forms part of the wider context of increasing competition for film and TV productions. Whilst California is providing targeted support for post-production, work is currently under way at federal level on a more comprehensive tax incentive scheme for film and TV productions. The planned US federal incentive is initially intended to cover 20 per cent of labour costs and, under certain conditions, could rise to as much as 30 per cent.