In the David Mamet satire “State and Main,” a film crew creates havoc when it descends on a small town in Vermont. In real life, Hollywood almost never comes to Vermont, one of 11 states without a production tax incentive. In fact, “State and Main” was filmed in Massachusetts.
Vermont has no film office either. Instead, it has Brian Carroll, founder of Film in Vermont, a one-man volunteer effort to promote the state’s locations. Carroll hasn’t had much luck convincing Montpelier to offer state tax credits. So he is looking to Washington, D.C., to provide a federal incentive, hoping that some of it will trickle down to Vermont.
“It really does level the playing field a bit more for us,” Carroll says. “It doesn’t necessarily give us a seat at the table. It does at least get us into the room where the conversation is happening.”
Across the country, Kelly Eastes has the same hope. Wyoming got rid of its film incentive in 2017. “It just got political,” says Eastes, who is the liaison for Film Casper. Since then, it’s been hard to attract much interest. “I think it would help us,” he says of a federal incentive. “We have so many locations that are pristine and easy to access. It would make us at least a little competitive with other states.”
Industry leaders are holding regular meetings and gearing up for a lobbying push in Congress this fall. The Motion Picture Assn., which represents the major studios and streamers, is preparing a report on the economic returns from film credits. Delegations are meeting with the tax-writing Ways and Means Committee. Their chief argument is that state-based tax incentives — which have come to dominate location decisions in the last 25 years — are not enough to keep film production from going abroad. They say that federal action is needed to compete with more generous incentives from Canada, Australia, the U.K. and Europe.
“States have been carrying the burden of keeping the industry alive,” says Katie Pryor, executive director of the Baton Rouge Film Commission and a co-founder of Film USA, an alliance of local film offices. “The states need federal support now. The game has changed.”
Discussions have been underway for nearly two years, in the wake of a dramatic downturn in domestic production. The slump has hit Los Angeles especially hard — with more than 50,000 jobs disappearing since 2022. Sen. Adam Schiff and Rep. Laura Friedman, Democrats from Burbank, were among the first to call for federal action to supplement state tax credits.
But support from the industry’s home state will only carry the initiative so far. The ultimate challenge is winning backing from rural states and from Republicans with little inclination to lift a finger for left-leaning Hollywood. Supporters must make the case that film and TV jobs are a national priority and not just a bailout for creative people on the coasts.
“It could help everybody,” says Bill Lafontaine of Skyway Studios in Nashville, Tenn. “It raises all the boats for every state in the U.S.”
Chris Fenton, a veteran Hollywood producer, has been making the rounds of right-wing podcasts — Steve Bannon, Newt Gingrich, Matt Gaetz and many more — to argue that supporting U.S. film production is a MAGA policy. He argues it will benefit red states like Kentucky, Louisiana, Texas and Tennessee as much as it helps traditional production hubs.
“With the right-leaning platforms, it’s very important to not talk about California or Los Angeles — those are really toxic words,” Fenton says. “The reality is this helps way more people outside of California than inside.”
Republican lawmakers are at least open to the idea, says Brian Papworth, executive director of the Coalition for American Production, a group of vendors and soundstage operators pushing for federal tax credits.
“We know we have tremendous momentum right now,” Papworth says. “I never left a Republican office where they didn’t understand the notion that there are so many people that make a living in
this industry.”
Rep. Brian Jack, a Republican from Georgia, has been visiting film sets in his district, and is said to be a key supporter. Advocates are also targeting Jason Smith, the Republican chairman of Ways and Means.
“There’s certainly Republican support, particularly from members from districts that see a lot of film and TV production,” says Rep. Nicole Malliotakis, a Republican from Staten Island, N.Y. “They are interested in doing something. It’s a question of what can get enough support to cross the finish line.”
Supporters will have to counter the argument that Hollywood is simply feeling the effects of technological disruption, and does not need a bailout from Washington. While traditional film and TV jobs are in decline, microdramas — cheap, app-based soap operas — and jobs in “new media” are on the rise.
“People are spending more of their time entertaining themselves now than ever,” says Patrick Adler, co-founder of Westwood Economics & Planning Consultants. “It’s kind of insane for the federal government to be contemplating anything like this.” The MPA has been pushing for a 20% labor credit that would cover both above- and below-the-line costs and stack on top of state rebates. It would cover film and TV, both scripted and unscripted, with a minimum spend of $1 million. To bring along the unions, productions would have to spend 75% of labor costs on U.S. workers.
Last year, Schiff circulated something similar — though with only a 15% credit. In his draft, above-the-line salaries for actors, directors, writers and producers would be capped at 30% of total labor costs. Any subsidy for above-the-line salaries faces potential political hurdles.
“Members of Congress want to make sure we’re not covering a multimillion-dollar salary for a celebrity,” Malliotakis says. “You’re going to have some Republicans who are going to look at this as a giveaway to liberal Hollywood. The idea is to come up with something that’s tailored.”
To get political support, lawmakers may also have to offer a bonus for filming in rural areas. State programs in California and New York each offer an extra 5% for shooting outside Los Angeles and New York — largely to gain backing from rural lawmakers in those states.
Asked in March whether a federal incentive would have to do something similar, Schiff was noncommittal.
“We’re considering a variety of facets that can be moved up or down in terms of what kind of incentives for independent productions, what kind of incentives for communities that don’t have much of a film industry,” he said, adding that he was mostly focused on “incentives to bring production back to the United States.”
Congress is in Republican hands, so for now at least it would be up to Republican lawmakers to come up with the language. One option on the table is to create a bonus for filming in an “opportunity zone” — a feature of the 2017 tax cut bill that would disproportionately help rural areas. If adopted, such a provision would also help Paramount and the Sunset Studios, both of which are in an opportunity zone, though it seems unlikely that other studios would go along with that without protest.
Many states are not waiting for federal support to try to attract film jobs, seeing it as key to diversifying their economies. Texas increased its incentive to $300 million every two years, while Kentucky introduced a new $75 million program in 2022.
Lexington, Ky., is best known for thoroughbred racing and bourbon, but is working hard to put itself on the map as a filming destination. Since the state introduced its tax credit, a disproportionate share of indie productions have come to Lexington. A federal incentive could only accelerate that progress, says Lisa Brin, who heads up FilmLex, the community’s film office.
“I think this is going to supersize everything we have to offer,” Brin says. “That will really help us grow our crew base and our infrastructure.”
In Florida, the film industry has suffered since the state stopped giving out tax incentives in 2015. Though some counties have tried to fill the void, it hasn’t been nearly enough to offset the loss of the state rebate.
“If there’s a national incentive, now a state like Florida can get back in the game,” says Tony Armer, former film commissioner for St. Petersburg-Clearwater, who co-founded Film USA.
Louisiana was the first state to offer film incentives, and was known as “Hollywood South” until Georgia surpassed it. Production has slowed there amid an industrywide contraction. Lawmakers also slashed their tax credit program from $150 million to $125 million in 2024 as part of a wider tax-cutting push.
“We are 1000% behind a federal film tax incentive,” says Jason Waggenspack, president of Film Louisiana.
Over the past 25 years, states and communities around the U.S. have fought among themselves to offer the best rebates and other inducements to production. Now, for the first time, they appear to be teaming up.
“We are feeling the squeeze of projects that leave the United States,” says Maggie Cunningham of the Cherokee Film Commission in Oklahoma. “Collaboration is our biggest flex right now.”
Bega Metzner, of the Moab to Monument Valley Film Commission in Utah, has been talking about having T-shirts made: “It’s a collaboration, not a competition.”
Charles Rivkin, the chairman and CEO of the MPA, argues that momentum is building behind the idea that incentives are “a smart investment in an iconic American industry and a backbone of American strength.”
A federal rebate, he says, would “deliver new activity for America’s small businesses, more American jobs and greater economic growth across all 50 states.”
That message, Papworth argues, is critical to getting anywhere on Capitol Hill.
“This cannot be just about Los Angeles,” he says. “It cannot be just about New York.”
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