A bipartisan group of four US Congress members have introduced the Create Act to extend and strengthen Section 181, the only federal tax incentive supporting national film and TV production.
The Creative Relief and Expensing for Artistic Entertainment (Create) Act would extend the Section 181 provision (which allows for 100% deduction of production costs within the same tax year), currently set to expire on 31 December, 2025, to the end of 2030. It would also increase the amount of production costs to which the provision can be applied to $30m or $40m, depending on production location, and introduce an annual inflation adjustment.
The bill was introduced by representative Judy Chu, Nicole Malliotakis and Senators Marsha Blackburn and Raphael Warnock.
Many industry leaders and various trade associations have voiced support for the Act to keep the incentive in place, especially as the US faces increased competition for film and TV projects from other countries offering enticing incentives.
According to FilmLA, the Greater Los Angeles area saw a nearly 20% decline in film and TV production in 2023. While the State of California recently more than doubled its Film and Television Tax Credit Program, the federal government lags behind.
"I’m so proud to introduce the CREATE Act, bipartisan, bicameral legislation to support good-paying, domestic creative jobs by extending and strengthening Section 181," says Chu. “With Section 181's expiration fast approaching in just a few months, it's so critical to not just extend this deduction, but strengthen it. Our bill would do just that and would ensure that the United States continues to invest in the incredible talent that exists in my district in Southern California and across the country."
“The Independent Film & Television Alliance® (IFTA®) strongly supports introduction of legislation by Representatives Chu and Malliotakis to extend Sec. 181 of the Internal Revenue Code, which provides an incentive for independent film and television producers to shoot their films in the U.S,” says Jean Prewitt, IFTA’s President and CEO. “This provision, first enacted in 2004, protects U.S film and TV production jobs, which make a major contribution to the U.S economy in states throughout the country. We are very appreciative of Representatives Chu and Malliotakis’s leadership on this important legislation”.
Charles Rivkin, Chairman and CEO of the Motion Picture Association (MPA), adds: "Extending and strengthening Section 181 will lead to more domestic film and TV production, and more American jobs. The MPA applauds Senators Blackburn and Warnock, alongside Representatives Malliotakis and Chu, for introducing the bill in their respective chambers and looks forward to Congress enacting this vital legislation.”
