Official and confirmed | Gavin Newsom signed a bill to protect Hollywood workers and address California's $750 million tax credit problem

In a strategic move to stem the constant migration of audiovisual productions to other states and countries, California Governor Gavin Newsom signed a legislative package designed to correct flaws in the entertainment industry's incentive program.

I just enacted a new @FilmCalifornia Tax Credit to support Californians working in post-production, including editing, sound, visual, and audio effects.

— Governor Gavin Newsom (@CAgovernor) September 19, 2026

This industry just can't be replicated anywhere else — and we're boosting the extraordinary people who make it possible. pic.twitter.com/w8Kx42N5cV

From the facilities of Warner Bros. Studios and the Television Academy, the governor gave the green light to bills SB 186 and AB 2319, securing the continuity of the annual $750 million tax credit fund and strengthening protections for local creators and technicians.

**Adjustments to the $750 million program and relief for independent cinema**

The signing of Senate Bill 186 resolves an intense controversy that erupted earlier in the year, when prior legislation imposed strict caps on the use of tax deductions that threatened the viability of independent projects. The new legislation formally exempts lower-budget productions from those annual limits and significantly improves liquidity for companies: the percentage of monetizable credit rises from 90% to 95%, while the timeframe for production companies to receive their cash reimbursements is drastically reduced from five years to two.

Industry representatives, including the Motion Picture Association, celebrated the initiative, noting that these changes restore California's competitiveness at a time when major titles — such as Paramount's Clueless sequel, DreamWorks' Donkey prequel, and Disney's Hexed — depend on this support framework. According to official figures from the Governor's Office, the expansion of the tax incentive program covers approximately 170 projects projected to generate more than $6.6 billion in economic activity and sustain around 35,000 direct and indirect jobs in the region.

**The first post-production incentive and a brake on job losses**

In parallel, the signing of Assembly Bill 2319 establishes for the first time in California's history a standalone tax incentive dedicated exclusively to the editing, sound mixing, musical composition, and visual effects sectors. Unlike traditional programs, this benefit grants between 35% and 50% in credits on eligible post-production expenses incurred within the state, without requiring that principal photography have taken place on California soil.

The measure responds to an alarming economic diagnosis: over the past 13 years, California's share of national post-production employment fell from 53% to 42%, forcing thousands of skilled professionals to endure lengthy periods of unemployment as this work migrated to jurisdictions offering greater benefits. In ratifying the legislation, Newsom emphasized that California retains the infrastructure, creative community, and talent necessary to lead global culture, sending a clear message that the state will actively fight to preserve its position as the world capital of film and television.

Clarín Newsletter