Julia Chirkova
Washington D.C. – As the 119th Congress reconvenes following the midterm elections, lawmakers are signaling a concerted effort to bring a long-sought federal film tax credit closer to fruition. With a limited legislative window before the end of the year, a bipartisan coalition of representatives and industry advocates are aiming to leverage existing momentum, including presidential backing and the unveiling of legislative text, to pass the proposed measure. However, the path forward is fraught with competing legislative priorities and potential fiscal concerns that could impede its final passage.
The proposed legislation, introduced in September, seeks to establish a 20% base federal tax credit for qualifying film and television projects produced within the United States. Further enhancing its attractiveness, the bill includes provisions for additional 5% bonus credits, potentially elevating the total credit to a maximum of 30%. Proponents argue that such a measure is crucial for revitalizing the American film industry, stemming the tide of jobs migrating overseas, and reinforcing the nation’s position as a global leader in entertainment production. The bill has garnered support across the aisle in both the House and the Senate, alongside a significant endorsement from the entertainment industry itself.
President Donald Trump has been a vocal proponent of a federal film tax incentive, publicly urging Congress to act before the close of the year. In late August, he articulated his support, stating that such legislation could be implemented "quickly, accurately, efficiently and, importantly, will benefit ALL of America." This presidential endorsement has provided a significant boost to advocates who believe that a federal incentive is essential to prevent an ongoing "exodus" of production to countries offering more favorable financial terms. The administration views the film and television sector not only as a major economic engine but also as a vital component of American "soft power" on the global stage.
The push for a federal film tax credit is not a new endeavor. For years, Hollywood has been lobbying for a national incentive to compete with the growing number of countries that offer similar benefits. As of the latest available data, over 65 nations provide national film tax credits, a stark contrast to the United States, which has historically relied on a patchwork of state-level incentives. This disparity, advocates argue, has placed American productions at a competitive disadvantage, forcing many to seek production locations abroad to manage costs.
A Bipartisan Foundation for an Industry Staple
The current legislative effort is spearheaded by a bipartisan pairing of Representatives: Laura Friedman, a Democrat from California, whose district encompasses a significant portion of Hollywood, and Brian Jack, a Republican from Georgia, representing the Atlanta metropolitan area, another burgeoning hub for film and television production. Both lawmakers have been instrumental in drafting the proposed legislation, working to bridge partisan divides and build consensus around the economic imperative of bolstering domestic production.
Representative Friedman, a former film producer herself, began her bipartisan outreach on Capitol Hill shortly after her arrival in early 2025, recognizing the need for a unified approach to address the industry’s challenges. She identified Representative Jack as a natural ally, given his district’s prominent role in the production landscape. Their collaborative efforts have since become a driving force behind the current push to enact federal film tax credits.
"The truth is, we have 65, at least, countries that offer national film tax credits," Friedman stated. "We are the only major film-producing country that does not. Entertainment’s our largest export in this country, and it’s a signature industry that’s important on many levels for the United States." This sentiment underscores the argument that the United States is ceding a significant portion of its global entertainment market share due to a lack of federal support.
Building Momentum: Industry Alliances and Presidential Endorsement
The effort to establish a federal film tax credit has gained significant traction through a confluence of industry-wide initiatives and high-level political support. Even prior to his second term’s commencement, President Trump signaled his interest in the issue, appointing prominent actors such as Jon Voight, Mel Gibson, and Sylvester Stallone as his "special ambassadors" to Hollywood. Over the past two years, figures like Jon Voight have played a crucial role, serving as a liaison between the White House, lawmakers, and industry stakeholders, facilitating dialogue and working towards a legislative consensus.
This concerted push has manifested in the formation of new organizational bodies aimed at advocating for the industry. The Congressional American Film & TV Production Caucus was launched in September, providing a dedicated platform for lawmakers to champion the cause. Simultaneously, the entertainment industry has intensified its lobbying efforts. A significant development was the recent formation of the American Entertainment Alliance, a coalition comprising major Hollywood talent agencies and other industry organizations. This group is dedicated to fortifying the U.S. film and television sector and supporting independent producers.
The American Entertainment Alliance, though formally announced in recent weeks, began its lobbying activities earlier. Akin Gump Strauss Hauer & Feld LLP registered to lobby on behalf of the organization in late August, reporting expenditures of $60,000 in the third quarter specifically targeting film tax credits. Their lobbying efforts include retaining a team of experienced professionals, such as Lauren Rubin, a former legislative director for Representative Suzan DelBene, a Washington Democrat who serves on the influential House Ways and Means Committee. Beyond this new alliance, established entities like Disney, Netflix, and the Motion Picture Association have also disclosed their focus on the film tax incentive bill in their third-quarter lobbying disclosures, indicating widespread industry backing.
President Trump’s social media pronouncements have consistently reinforced his support, with one notable post asserting, "what we watch on the Silver Screen should be made in what was once the Movie and Motion Picture Capital of the World." This statement highlights a sentiment that the U.S. has lost its preeminence in film production due to economic factors, and that federal intervention is necessary to reclaim that status.
Representative Friedman emphasized the President’s understanding of the industry’s economic and cultural significance. "He understands the importance of it from a soft-power perspective, and he has seen himself the good jobs that this industry provides," she stated. "I’m very grateful that he’s been talking almost since day one of his second term about the downfall of the film industry in this country."
Adding to the bipartisan appeal, Representative Nathaniel Moran of Texas, a Republican member of the Ways and Means Committee and a sponsor of the House bill, stressed that the benefits of the film tax credit extend beyond the traditional production centers of California, New York, and Georgia. "I think it’s really important for we rural Republicans to be at the lead of bills like this, to remind folks that this is an economic issue that touches on all of our districts, and frankly, is a national implication issue when it comes to storytelling," Moran articulated. This perspective aims to broaden the appeal of the legislation by framing it as a national economic development initiative.
Key industry guilds and unions have also thrown their weight behind the proposal. The Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA), the Directors Guild of America, and the American Society of Composers, Authors and Publishers are among the organizations that have publicly endorsed the bill. Sean Astin, President of SAG-AFTRA, expressed optimism, stating, "The bipartisan support for this bill has me optimistic that we will, at long last, get a federal tax incentive that will make us competitive with the rest of the world. Many producers would rather film in the United States, with its deep pool of talent, but find it difficult to do so due to the financial realities, and they end up taking their productions overseas."
Fiscal Clouds and Doubts Persist
Despite the broad-based support and the urgency expressed by industry stakeholders, significant hurdles remain, primarily centered on the potential financial implications of the proposed tax credit. The exact cost of the legislation is yet to be definitively determined, with a crucial score from the nonpartisan Joint Committee on Taxation anticipated to heavily influence its legislative trajectory. Representative Moran indicated that the bill was introduced early in the fall precisely to allow lawmakers and stakeholders time to review this score and incorporate feedback.
"When we see the score, that’s going to give us a lot of good information about whether and to what extent and what areas we might need to readjust so that we can make this a bill that can actually pass and get signed into law," Moran explained, adding, "we want to find some offsets, but we need that score." The search for revenue offsets will be critical in addressing concerns from fiscal hawks who are apprehensive about increasing the national deficit, particularly as Congress may also need to address the debt ceiling in the upcoming lame-duck session.
Concerns about the bill’s fiscal impact have been voiced by policy analysts. Adam Michel, director of tax policy studies at the libertarian-leaning Cato Institute, estimated that the legislation could potentially cost between $33 billion and $49 billion over the next decade, based on industry projections. Michel further questioned the efficacy of such credits, citing research suggesting that state-level incentives have not consistently delivered significant economic benefits.
"We have inflation that’s stubbornly high. We have this sort of broader tariff regime that is wreaking havoc on American finances and the broader economy," Michel observed. "The president and, it seems, Congress is, instead of dealing with all of those things, more focused on how they write a $50 billion check to an industry that has come hat in hand." This critique highlights a broader debate about fiscal priorities and the role of government in supporting specific industries.
Navigating the Legislative Labyrinth: The Path Forward
The successful passage of the federal film tax credit will likely hinge on its ability to be attached to a larger, must-pass legislative package. With time running short before the end of the 119th Congress, lawmakers are exploring several potential avenues. A year-end tax package, designed to include provisions with bipartisan support, is a prime candidate. However, such packages can become complex battlegrounds as legislators vie to advance their individual priorities. Alternatively, appropriations bills, which are essential for funding government operations, often serve as vehicles for other legislative initiatives.
Other potential legislative vehicles that could carry the film tax credit include a Senate-passed tax administration package, extensions of expiring tax breaks, and shipbuilding legislation. The inclusion of the film tax credit within any of these packages will depend on intensive negotiations and the ability to secure sufficient bipartisan consensus.
Representative Linda T. Sánchez, a Democrat from California and a proponent of the film tax credit, anticipates a "mad rush" upon Congress’s return as members scramble to identify a suitable legislative vehicle and garner additional support for the proposal. "We’ve gotten to a place where the studios and the unions agree, the Democrats and the Republicans agree, the House and the Senate agree," Sánchez stated. "We think that it’s a bill the president would sign if we can get it included in a bill that’s moving before the end of the year." This statement reflects a high degree of confidence among proponents that the core legislative elements are in place, with the primary challenge being the procedural hurdle of enactment.
The coming weeks will be critical as lawmakers attempt to reconcile the industry’s urgent call for federal support with the nation’s fiscal realities. The bipartisan nature of the proposal, coupled with presidential backing, provides a strong foundation, but the ultimate success of the federal film tax credit will depend on the legislative maneuvering and the ability to overcome lingering fiscal objections. The outcome will significantly shape the future competitiveness of the American film and television industry on the global stage.
