How the Motion Picture Association's Study Rallied Hollywood Behind a Federal Tax Credit

The Motion Picture Association released an economic impact study on September 15 that has become the catalyst for an unusually unified push across Hollywood's fractious institutions. The study, commissioned from consultancy Olsberg SPI, projects that a 20% federal tax credit for film and television production would double domestic production by 2032 and generate $249 billion in total gross economic value through 2035.

Alongside the study, the U.S. Film & TV Production Coalition launched with backing from major studios, unions including SAG-AFTRA and the Writers Guilds, the Directors Guild and Producers Guild, and over a dozen other guilds and industry organizations. The coalition has established itself as the coordinating force pushing Congress to introduce federal legislation by the end of the month. The push reflects a shared concern that the American film and television industry has lost significant share of global production to international competitors over the past four years.

Why studios and unions mobilized now

The federal initiative arrives at a moment when U.S. production has stabilized after four years of decline. According to data from ProdPro, reported by entertainment payroll firm Entertainment Partners, U.S. film and television production spending reached $3.8 billion in the first quarter of 2026, representing 38% of global production. That figure masks a significant erosion: the U.S. held 52% of global production spending in 2022. The absolute production share has remained stable recently, but the baseline against which it is measured has shifted.

The migration of work abroad has accelerated in high-budget productions. The United Kingdom remained the leading international production hub in 2026, according to industry surveys, offering a 40% tax credit and established soundstage infrastructure. Canada, despite its traditional dominance, saw high-budget spending fall 13% to $4.6 billion in 2025. Continental Europe, driven by Hungary and the Czech Republic, increased production spending 78% year-over-year in early 2026, while Mexico introduced its first nationwide 30% tax incentive in February.

These figures explain the coalition's urgency. Without a federal incentive, studios and unions argue, the ongoing drift of production will accelerate as international competitors continue expanding their offerings.

What the study claims about jobs and spending

The MPA's Olsberg SPI study analyzed 20 films produced by MPA member companies. According to the research, a 20% federal tax credit would make 16 of those 20 films economically viable to produce in the United States rather than abroad. Between 2027 and 2035, the credit would generate $125.3 billion in direct production spending. The study projects this would yield $249.1 billion in total added gross economic value to the American economy.

The research also estimates that the credit would support an annual average of 143,500 additional jobs across the country. These figures depend on the credit taking effect on January 1, 2027, applying to projects with domestic budgets exceeding $1 million, and allowing productions to combine the federal incentive with existing state tax credits rather than choosing between them. The study examined eligibility across films, scripted television, animation, and reality television. The study does not estimate an economic return per dollar invested, in part because the details of the incentive's final structure and cost have not been finalized.

How state incentives work and why a federal credit matters

The architecture of current state incentives explains why a federal credit structured to stack with state programs would reshape location decisions. Georgia currently offers a 20% tax credit for post-production companies on a $500,000 spend, plus an additional 10% if the project is filmed in the state. California, after more than doubling its credit cap from $330 million to $750 million in July 2025, approved 147 film and television productions in the following 10 months—a 53% year-over-year increase from the same period a year earlier. New York maintains an $800 million program with $100 million allocated specifically for independent productions. New Jersey offers up to 40% for productions using in-state studio partners, while Texas permits stackable incentives that can reach 31% effective rates for qualifying productions as of September 1, 2026.

Currently, producers choose the single state offering the highest combined value. A federal 20% credit that could be applied on top of Georgia's, New York's or California's existing programs would fundamentally alter the mathematics of location scouting. Instead of choosing between Georgia and, say, Canada's provincial incentives, studios could layer a federal credit onto both. This stacking approach underpins the coalition's economic projections and explains why the credit is structured as it is.

The coalition spanning studios, unions and guilds

The breadth of the coalition behind the federal incentive is notable. Film and television studios are represented in the coalition through the Motion Picture Association, alongside film commissioners and other entertainment industry groups. Labor organizations backing the effort include SAG-AFTRA, the Writers Guild of America West and East, the Directors Guild of America, IATSE, the International Brotherhood of Teamsters, the Producers Guild of America, the Association of Talent Agents, and the National Association of Voice Actors.

Supporting organizations also include CreativeFuture, the Coalition for American Production, FilmUSA, the Future Film Coalition, the Independent Film & Television Alliance, the Laborers International Union of North America, and the Television Academy. This diversity—from studios to below-the-line unions to professional guilds—reflects the breadth of interests affected by production locations. The coalition has positioned the federal incentive as an issue that transcends typical industry fault lines.

How the incentive would work

The proposed incentive is structured as a 20% base tax credit on labor costs, both above-the-line and below-the-line. According to Congress's draft legislation, bonuses could bring the credit up to 30% for productions meeting certain criteria. The proposed structure allows studios to "stack" the federal credit on top of existing state tax incentives in Georgia, Louisiana, North Carolina and other states, rather than forcing producers to choose between the two.

This stacking approach is central to the incentive's architecture. Current state incentives range from 20% in lower-cap states to 40% in New Jersey for specific configurations. Because they operate independently, studios have historically chosen to film in whichever single state offered the largest credit plus the best infrastructure and labor availability. A federal credit that stacks would make U.S. locations competitive against countries like Canada and the United Kingdom that offer combined incentives. The proposal specifies eligibility for projects with domestic budgets exceeding $1 million, including films, scripted television, animation, and reality television.

Political support and legislative timeline

The federal incentive has secured backing from President Trump, who endorsed the idea in August and called on Congress to pass it. The bipartisan character of support sets the issue apart in a polarized Congress. Lawmakers from both parties have indicated they view the incentive as an opportunity to bring jobs and tax revenue to their districts without the partisan divides that complicate other legislation.

House members including Rep. Laura Friedman (D-Calif.) and Rep. Brian Jack (R-Ga.) are drafting legislation. According to reports from September, members of Congress were preparing to introduce a bill by the end of the month. The proposed structure of the credit and the qualifying production types remain subjects of ongoing negotiations between the coalition and Congress. The MPA study's economic modeling assumes the credit would take effect on January 1, 2027.

Where the effort stands in Washington

As of mid-September, the federal incentive remained in the drafting phase. No formal bill had been introduced to Congress. The coalition's public campaign—anchored by the MPA study's economic projections—is designed to build pressure on lawmakers to move quickly and broadly support the measure. The coalition has framed the initiative as a tool for retaining American jobs and tax base against international competition.

The effort faces practical questions about cost and timing. The bill has yet to go to the Joint Committee on Taxation, which will score how much it would cost — expected to run into the billions of dollars. President Trump has argued the cost would be offset by increased tax revenue from economic activity, a claim the MPA's study does not attempt to quantify and one typically subject to debate among economists and budget analysts. If passed, the initiative could shape production decisions for the 2027-2028 production cycle; some supporters are optimistic about passage during the lame-duck session after the November election, though it may be more likely to happen in 2027.

Related coverage: How production tax credits shape where studios choose to shoot.