California’s Tax Credit Initiative
California has earmarked $342 million in tax credits to revitalize production of major films, including a historic allocation of $43.9 million for the upcoming installment of the ‘Jumanji’ franchise.
Additionally, the state is dedicating $37.2 million for Michael Mann’s ‘Heat 2’ and $38.4 million for a new film by the Daniels, the Oscar-winning duo behind ‘Everything Everywhere All at Once.’ Initially, this project received $20.8 million in March, but following the recent expansion of the state’s incentive program, it will benefit from an additional nearly $18 million.
Changes to the Incentive Program
A representative from the California Film Commission stated that the Daniels’ film had initially withdrawn from the program after its first allocation and subsequently reapplied. Now the state will cover 35.8% of qualifying expenses, an increase from the previous rate of 19.5%. Importantly, the project’s employment figures remain unchanged.
‘Jumanji’ Franchise Details
The next ‘Jumanji’ film, the fourth in the series and the third since 2017, is scheduled to commence filming in November, with a projected release date set for December 2026. Director Jake Kasdan expressed his excitement about producing the film in California.
“I have long looked forward to the day when the California Film Incentive would help us bring movies like this one back home — and now that it does, I am so grateful that ours will be among the first to take advantage of the new program,” Kasdan said. “Making these big popcorn movies requires hundreds of specially-skilled people, and the world’s finest live in California.”
Context of the Expansion
In June, Governor Gavin Newsom signed off on a substantial expansion of the tax credit program in response to an industry-wide downturn that has seen production jobs decrease by 29% since 2022. With the new incentives, the state plans to allocate $337 million annually to feature films and $412 million to television shows over the next five years.
Recent data from ProdPro indicates that only eight major feature films were in production in California in the latest quarter, representing a 43% decline compared to the same period in 2024. In the U.K. and Canada, film production also saw declines of 33% and 6%, respectively.
California’s Competitive Landscape
Although the United States remains the largest hub for global film production, California faces strong competition from states such as Georgia, New Jersey, and New York, which offer various subsidies to attract filmmakers. Meanwhile, Canada, the U.K., and others provide competitive incentives to lure productions abroad.
Prior to the recent expansion, tax credits for any single project were capped at $25 million, with most projects limited to $20 million. The new structure has raised this ceiling to $48 million. In July, the California Film Commission allocated $42.8 million to a new Hulu series directed by Dan Fogelman.
Major Projects in Latest Allocation
Some notable feature film projects included in the latest tax credit distribution feature significant budgets and strong directorial talent, reflecting California’s commitment to revitalizing its film industry.
