Since the early days of film in America, Hollywood has been the central hub of the industry. Nearly all of the major studios are based there, and productions are often done on sound stages in California.

 

Lately, though, many filmmakers and studios are choosing to make their pictures elsewhere, bringing with them jobs and millions of dollars in tax revenue. This phenomenon has people wondering why films are being made outside of California. The answer basically comes down to competitive tax credits for feature film productions in 40 states and many countries.

 

Even though it is far easier to make films in California, since the industry is largely located there, it is cheaper to produce content elsewhere because of these financial incentives offered by some state governments. New York’s tax credit program is capped at $420 million, and some states have uncapped benefits; California’s program is capped at $100 million. Looking at the numbers, it is obvious why productions are moving. Big budget studio films like last year’s “Iron Man 3” and “Man of Steel” were made outside of the California.

 

Lawmakers in California are currently debating whether or not to extend tax benefits to productions with budgets larger than $100 million. This would entice producers to stay in the Golden State far more than their current rule of allowing incentives only for productions with budgets of $75 million or less.

 

Many California based filmmakers are hoping that the law will change, and understandably so. As it stands now, it is looking very likely that the industry may move all together.

 

Do you think it would be a good idea for California to extend their tax incentives? Let me know in the comments below, and find me on Twitter @TuckerPoikonen.