Netflix’s ‘The OA’ and Disney’s ‘A Wrinkle in Time’ among projects that receive $339 million in tax breaks
HBO’s “Veep,” Netflix’s “The OA” and Disney’s “A Wrinkle in Time” were among dozens of TV and movie projects that received state tax breaks last year.
California awarded $339 million in tax credits in the fiscal 2016-2017 year that ended in June, with the sum spread over 64 film and television projects, according to a new report from the state’s film commission.
The amount is nearly double the credits awarded the last fiscal year, which saw $173 million in tax breaks going to 47 projects.
Producers can receive tax breaks to offset as much as 25% of certain production costs, such as building sets and hiring crew members.
The incentives are part of an enhanced program that went into effect in 2015. Set to run for five years, the enhanced program raised funding from $100 million annually to $230 million in the first year, and then to $330 million annually thereafter.
Actual amounts vary, however, because producers change their plans. The commission said it awarded $173 million last year because some projects withdrew and the balance was rolled over to the following year.
California has seen a dozen TV series relocate from out of state since the new program took effect. They include Fox’s “Lucifer,” FX’s “Legion” and Showtime’s “The Affair.”
“I think that’s a pretty great indicator that the change is working,” said Amy Lemisch, executive director of the California Film Commission.
The tax incentives are part of the state’s effort to bring back movie and TV shoots to California and reverse the tide of production to Georgia, Louisiana and other states that court Hollywood with steep tax breaks.
While some have questioned whether studios are deserving of tax incentives, state officials have argued that the program is necessary for California to remain competitive in the entertainment industry. They have also argued that the incentives spur local spending, thereby boosting the state’s economy.
The film commission estimates the tax credits for the most recent fiscal year yielded $2.4 billion in in-state spending, including $903 million in qualified wages — which doesn’t include star salaries or other top-line compensation for directors and other prominent talent that don’t qualify for tax breaks. Last year saw an estimated $1.3 billion in spending, including $509 million in qualified wages.
The state also saw a 12% increase in hours worked in-state by below-the-line crew members between calendar 2016 and 2014, which was the last year of the previous tax credit program.
California still lags in terms of attracting major movie shoots. In 2016, 31 big‐budget feature films with budgets over $75 million were released. But only one of those films was shot primarily in California — Disney’s “The Jungle Book.”
Some major movie productions take advantage of the enhanced incentives, which no longer feature a budget cap. Recent announcements include Paramount’s “Bumblebee,” a spinoff prequel of its “Transformers” franchise, and Disney’s “Captain Marvel.”
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