California Expands Film Tax Credit to $750 Million Amid Scrutiny Over Industry Ties

California has officially expanded its Film and Television Tax Credit Program to $750 million annually, effective July 1, 2025, a move aimed at bolstering in-state production and job creation. The expansion, signed into law by Governor Gavin Newsom, more than doubles the previous allocation of $330 million. This comes as a recent social media post by "Joey - Master of Wit and Sarcasm" on X (formerly Twitter) alleged a "grift" involving the incentives, Netflix Chairman Reed Hastings, and a political campaign.

The expanded program, administered by the California Film Commission, is designed to keep film and television projects within the state, which has seen production decline due to more competitive incentives offered by other states and countries. The tax credits are awarded to qualified productions, offering a base incentive of 35-40% and are now refundable, aiming to stimulate economic activity and support thousands of industry jobs.

Contrary to the tweet's assertion that Netflix Chairman Reed Hastings personally received $70 million from these funds, official allocations show that tax credits are granted to production entities, not individuals. For instance, Netflix's comedy series "Bad Thoughts" was recently awarded $10.2 million in tax credits to relocate its second season to California under the new program. This allocation is part of a broader round of $107.5 million distributed among 22 television projects.

The tweet also linked the film incentives to a $2 million donation by Reed Hastings to the "Yes on 50 campaign." While records confirm Hastings did donate $2 million to a "Yes on 50" campaign, this contribution occurred in 2016. Proposition 50 was a ballot measure that allowed the state Senate to suspend members without pay, a matter distinct from the current film tax credit expansion and its objectives.

Furthermore, the social media post questioned Netflix's film production in California for 2024 and 2025, stating the author "could not find any." However, Netflix has been an active participant in California production, with "Bad Thoughts" relocating for its 2025 season. Other Netflix projects, such as "The Diplomat" and "Leave the World Behind," also received California tax credits in 2024, indicating ongoing production activity within the state.

Governor Newsom's administration has emphasized that the program's expansion is a strategic investment to reinforce California's position as a global leader in entertainment production. The state anticipates that the increased incentives will generate significant economic activity and create thousands of new jobs for cast and crew members across California.