A federal film and television tax credit is something Hollywood has long wanted, and President Trump’s recent call for one signals new momentum. In a recent Truth Social post, he asked for Congress to draft and pass a bill to be called “The Motion Picture, Television, and Entertainment Revitalization Act” to provide a federal tax incentive that would allow the U.S. to compete with other countries for productions. But some may be surprised to learn that this is no longer just a Hollywood issue — it’s an economic lifeline for states across the country that have been hemorrhaging productions to foreign competitors for years.
For too long, the conversation around film incentives has been framed as a coastal elite issue, a favor to Los Angeles. This framing fundamentally misunderstands where American productions actually film today — and where they’re fleeing to.
The reality is that Los Angeles faces significant obstacles that make it increasingly difficult to film here. Rising costs, complex permitting processes, and infrastructure challenges have made the city less competitive even for productions that want to stay local. The studios may be headquartered in L.A., but their productions have been moving elsewhere for years, and a federal tax credit alone won’t solve these structural problems.
The film industry has spread from California to states like Georgia, Louisiana, Ohio, and Florida. Those states invested heavily in soundstages, developed skilled local crews, and created competitive incentive packages (up to 30 percent in Georgia and 40 percent in Louisiana). They benefited enormously from production jobs and related tax revenues, with Georgia hosting major, big-budget productions across a range of genres, while Louisiana earned its nickname as “Hollywood South.”
But as productions increasingly move overseas, these states are bearing the brunt of the exodus. After hitting a peak of $4.4 billion in spending on film and TV production in 2022, Georgia has tumbled to $2 billion in the last fiscal year (a 10-year low), with total productions dropping from 412 to 280. Louisiana has fared even worse: production dropped by roughly 65 percent over a three-year period, and the state has lost 52.7 percent of its film jobs since 2021, the largest percentage decline in the country.
And it is those states that stand to benefit the most from a federal tax incentive.
The generous state incentives simply can’t compete with what foreign governments are offering, when combined with lower labor and other costs. The United Kingdom offers a 40 percent tax credit backed by its national treasury and has built vast soundstage capacity that makes it Hollywood’s favorite destination for blockbusters. That advantage has become decisive for big-budget productions: projects once expected to film in U.S. production hubs are increasingly choosing U.K. soundstages, where incentives combine with lower labor and production costs.
Streamers like Netflix are also increasingly filming abroad while producing fewer shows overall. Canada is particularly instructive: productions there can stack a 25 percent federal tax credit on top of provincial credits that range from 25 percent to 45 percent, creating combined incentives that can exceed 50 percent in provinces like British Columbia and Ontario. When a production can save 40 to 50 percent or more by filming abroad, no individual state tax credit can close that gap alone.
Approximately 80 countries around the world currently offer a national tax credit. The U.S. isn’t one of them.
The result has been a steady exodus of American productions, and the jobs that come with them, to foreign soil. And this exodus comes at a particularly vulnerable moment. The American film industry is facing an existential crisis: the post-streaming wars contraction has shrunk the number of productions being greenlit, while competing forms of entertainment and the specter of AI are adding to the uncertainty.
These aren’t just jobs for actors and directors. Film productions employ electricians, carpenters, caterers, truck drivers, hotel workers, and countless other working-class Americans. When a major production films in Georgia or Louisiana, it pumps millions of dollars into local economies, from hardware stores to restaurants to dry cleaners. Those communities that built their economies around film production are now watching that lifeline slip away overseas.
This is why a federal credit is naturally bipartisan. Democrats have long supported the entertainment industry, but Republicans representing production hub states understand something equally important: this is about local jobs.
A federal film incentive wouldn’t pick winners and losers among the states, it would level the playing field against foreign competition and let American states compete on their own merits. Currently, each state must shoulder the entire cost of competing against the combined resources of national governments abroad. A federal credit would create a baseline that all states could build upon.
Imagine Georgia’s 30 percent percent combined with a 20 percent federal credit for a potential 50 percent total — finally matching what Canada offers. States could still differentiate themselves with additional state-level incentives, infrastructure investments, and workforce development – but they’d be competing on a level playing field. Even a state like Florida, that let its production incentive lapse in 2016 and saw the number of productions decrease significantly, could benefit because a Florida production would at least be eligible for the federal incentive.
What could such a federal program look like? The details are still being worked out and will inevitably change as the bill works its way through the legislative process, but media reports have suggested that the bill will likely include a base credit of around 20 percent on qualified domestic spending, potentially with bonuses for productions that film in underserved regions or complete post-production domestically. This federal credit could then be stacked on top of the individual state’s incentive. The key is simplicity and predictability, giving producers confidence that American locations can compete with foreign alternatives.
President Trump is right to put this on the table. Congress shouldn’t leave the details to chance. Any federal tax credit worth passing should stack automatically on top of state incentives and apply the same regardless of whether a production files from Atlanta, Shreveport, or Burbank. That’s the difference between a bill that saves Hollywood and one that saves American filmmaking.
Sam Roseme is a partner in Reed Smith’s Century City office. He is a entertainment and corporate lawyer whose practice spans the full spectrum of the industry, with a particular focus on film, television, and digital media.
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