California governor wants to work with Trump on $7.5B federal film tax credit to aid movie industry

By Darren Lyn

HOUSTON, United States (AA) - California Governor Gavin Newsom announced Monday that he wants to work with the Trump administration to create a $7.5 billion federal film tax credit to boost the entertainment industry.

"America continues to be a film powerhouse, and California is all in to bring more production here," Newsom said in a statement.

Newsom's announcement comes 24 hours after President Donald Trump stunned Hollywood by announcing steep tariffs on films "produced in Foreign Lands."

If approved, the proposal would be the largest single government subsidy program ever for the movie industry in the US and the first of its kind at a federal level, according to the New York Times.

Nearly 40 states currently have individual incentives to attract and retain film and television production, with no single state program distributing more than $1 billion per year. California currently allocates $330 million annually, so if the new federal tax credit becomes a reality, it would literally be a gold mine for the Golden State.

"Building on our successful state program, we’re eager to partner with the Trump administration to further strengthen domestic production and Make America Film Again," Newsom continued, playing off of Trump's Make America Great Again campaign slogan.

On Sunday, Trump called for a 100% tariff on all films produced outside the United States.

"WE WANT MOVIES MADE IN AMERICA, AGAIN!" the president posted on social media. It confused many in Hollywood, which has lost plenty of film and television production to other states -- such as Louisiana and Texas -- and nations which offer greater tax credits and cheaper labor.

Questions remain about Trump's plan, such as, what kinds of movies would face tariffs, whether tariffs would apply only to movies receiving tax incentives from foreign countries or to any movie shot overseas, and whether foreign films and post-production work would be included.

While the specifics of Newsom's massive tax credit initiative are unclear, the governor's proposal is reported to be modeled after a similar incentive program in his state.

US Senator Adam Schiff of California announced earlier Monday that his office was also working on a federal film incentive proposal.

Hollywood, and the rest of the US, have seen the once-booming movie and TV industry erode over recent years with massive job cuts and financial incentives that have moved work overseas.

The Alliance of Theatrical Stage Employees said Monday that tens of thousands of jobs across the United States have been lost in just the past two years.