AB2319 - Personal Income Tax Law: Corporation Tax Law: credits: qualified motion picture: post-production.

Amended IN Senate August 27, 2026 Amended IN Senate August 21, 2026 Amended IN Senate August 13, 2026 Amended IN Senate June 25, 2026 Amended IN Assembly May 21, 2026 Amended IN Assembly March 19, 2026 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Assembly Bill No. 2319 Introduced by Assembly Member Schultz (Coauthor: Assembly Member Schiavo) (Coauthors: Senators Allen and Grayson) February 19, 2026 An act to amend Sections 17039 and 23036 of, and to add Sections 17053.98.5 and 23698.5 to, the Revenue and Taxation Code, relating to taxation, and making an appropriation therefor. LEGISLATIVE COUNSEL'S DIGEST AB 2319, as amended, Schultz. Personal Income Tax Law: Corporation Tax Law: credits: qualified motion picture: post-production. The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws, including various motion picture credits, commonly referred to as motion picture credit 1.0, 2.0, 3.0, and 4.0, and the certified studio credit, to be allocated by the California Film Commission in differing amounts equal to specified percentages of the qualified expenditures of a qualified motion picture in this state. Existing law establishes the continuously appropriated Tax Relief and Refund Account and the Corporation Tax Fund and provides that payments required to be made to taxpayers or other persons are to be paid from those funds. This bill would allow a credit against those taxes in an amount between 35% and 50% of qualified expenses relating to the post-production of a qualified motion picture in California to be allocated by the California Film Commission, as specified. The bill would require the credit to be administered in the same manner as the motion picture credit 4.0, except as specified. The bill would require the California Film Commission to utilize a post-production services ratio, as defined, to allocate credits, as specified. The bill would limit the aggregate amount of credits allocated in a fiscal year based on a determination made by the Legislature in the annual Budget Act plus additional amounts, as described. The bill would require that 85% of the total allocable credits are reserved for qualified taxpayers that attest, under penalty of perjury, that they will abide by specified labor condition requirements. By expanding the scope of the crime of perjury, this bill would impose a state-mandated locale program. This bill would allow a qualified taxpayer to elect to be paid a refund if the amount allowable as a credit exceeds the qualified taxpayer’s tax liability for the taxable year, as specified. By requiring moneys to be paid from the Tax Relief and Refund Account and the Corporation Tax Fund, the bill would make an appropriation. Existing law requires any bill authorizing a new tax expenditure, as defined, to include tax credits, to contain, among other things, specific goals, purposes, and objectives that the tax credit will achieve, detailed performance indicators, and data collection requirements. This bill would include findings and reporting requirements in compliance with this requirement. The bill would require exchange of information between the Legislative Analyst’s Office and other specified agencies in order to comply with these requirements. The bill would make the unauthorized disclosure of this information subject to existing law, the violation of which is a crime. By expanding the scope of a crime, this bill would impose a state-mandated local program. This bill would incorporate additional changes to Sections 17039 and 23036 of the Revenue and Taxation Code proposed by AB 2222 to be operative only if this bill and AB 2222 are enacted and this bill is enacted last. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. Digest Key Vote: 2/3 Appropriation: YES Fiscal Committee: YES Local Program: YES Bill Text The people of the State of California do enact as follows: SECTION 1. (a) The Legislature finds and declares all of the following: (1) California film and TV productions greatly benefit from the current motion picture tax credit 4.0. (2) That credit does not cover post-production when principal photography takes place outside of California or the project otherwise did not qualify for a motion picture tax credit, leaving a significant gap in the state’s incentive framework. (3) Post-production expenditures have increasingly migrated to competing domestic and international jurisdictions offering targeted incentives. These jurisdictions include New York, Louisiana, New Mexico, New Jersey, Georgia, Pennsylvania, the United Kingdom, Ireland, Canada, Australia, Spain, France, Italy, and Qatar. This ever-increasing migration is resulting in reduced utilization of California’s existing post-production ecosystem and a massive decline in taxable wages. (4) Major scoring facilities and stages, such as Sony, Fox, Warner Brothers, and Skywalker, are not generating as much revenue as in previous years and are at risk of closure. Editorial houses are also losing revenue and talent due to projects posting out of state. (5) Editorial houses and post-production service companies throughout California are losing revenue and skilled workers to out-of-state productions. (6) Protecting the future of California’s film and television industry aligns with the California Jobs First State Economic Blueprint, which recognizes that targeted incentive programs produce substantial returns on public investment by supporting good-paying jobs, increasing taxable wages, expanding local vendor spending, and generating broader economic activity. (7) The tax credit program created by this act is not intended to compete with or replace California’s principal photography incentive, but to complement it by capturing post-production activity not otherwise eligible for existing credits. (b) This act shall be known as the “California Post-production Tax Credit,” a standalone, post-only tax credit program to incentivize film and television productions to choose to complete their post-production work within California, wherein the project either did not film principal photography in California or otherwise did not receive the California Film and Television Tax Credit. SEC. 2. Section 17039 of the Revenue and Taxation Code is amended to read: 17039. (a) Notwithstanding any provision in this part to the contrary, for the purposes of computing tax credits, the term “net tax” means the tax imposed under either Section 17041 or 17048 plus the tax imposed under Section 17504 (relating to lump-sum distributions) less the credits allowed by Section 17054 (relating to personal exemption credits) and any amount imposed under paragraph (1) of subdivision (d) and paragraph (1) of subdivision (e) of Section 17560. Notwithstanding the preceding sentence, the “net tax” shall not be less than the tax imposed under Section 17504 (relating to the separate tax on lump-sum distributions), if any. Credits shall be allowed against “net tax” in the following order: (1) Credits that do not contain carryover or refundable provisions, except those described in paragraphs (4) and (5). (2) Credits that contain carryover provisions but do not contain refundable provisions, except for those that are allowed to reduce “net tax” below the tentative minimum tax, as defined by Section 17062. (3) Credits that contain both carryover and refundable provisions, except the credit described in paragraphs (9) and (11). (4) The minimum tax credit allowed by Section 17063 (relating to the alternative minimum tax). (5) (A) For taxable years beginning on or after January 1, 2002, and before January 1, 2022, credits that are allowed to reduce “net tax” below the tentative minimum tax, as defined by Section 17062. (B) For taxable years beginning on or after January 1, 2022, credits that are allowed to reduce “net tax” below the tentative minimum tax, as defined by Section 17062, except the credits described in paragraphs (7), (8), (9), (11), and (12). (6) Credits for taxes paid to other states allowed by Chapter 12 (commencing with Section 18001). (7) For taxable years beginning on or after January 1, 2022, the credit allowed by Section 17052.10 (relating to the elective tax under the Small Business Relief Act). (8) For taxable years beginning on or after January 1, 2026, the credit allowed by Section 17052.11 (relating to the elective tax under the Small Business Relief Act). (9) For taxable years beginning on or after January 1, 2027, and before January 1, 2032, the credit allowed by Section 17053.98.5. (10) Credits that contain refundable provisions but do not contain carryover provisions, except the credit described in paragraph (11). (12). (11) For taxable years beginning on or after January 1, 2025, the credit allowed by Section 17053.98.1. (12) For taxable years beginning on or after January 1, 2027, the credit allowed by Section 17039.5. (13) The credits provided by Sections 17061 (relating to refunds pursuant to the Unemployment Insurance Code) and 19002 (relating to tax withholding). (b) The order within each paragraph of subdivision (a) shall be determined by the Franchise Tax Board. (c) (1) Notwithstanding any other provision of this part, no tax credit shall reduce the tax imposed under Section 17041 or 17048 plus the tax imposed under Section 17504 (relating to the separate tax on lump-sum distributions) below the tentative minimum tax, as defined by Section 17062, except the following credits: (A) The credit allowed by former Section 17052.2 (relating to teacher retention tax credit, repealed on August 24, 2007). (B) The credit allowed by former Section 17052.4 (relating to solar energy, repealed on December 1, 1989). (C) The credit allowed by former Section 17052.5 (relating to solar energy, repealed on January 1, 1987). (D) The credit allowed by former Section 17052.5 (relating to solar energy, repealed on December 1, 1994). (E) The credit allowed by Section 17052.12 (relating to research expenses). (F) The credit allowed by former Section 17052.13 (relating to sales and use tax credit, repealed on January 1, 1997). (G) The credit allowed by former Section 17052.15 (relating to Los Angeles Revitalization Zone sales tax credit, repealed on December 1, 1998). (H) The credit allowed by Section 17052.25 (relating to the adoption costs credit). (I) The credit allowed by Section 17053.5 (relating to the renter’s credit). (J) The credit allowed by former Section 17053.8 (relating to enterprise zone hiring credit, repealed on October 3, 1997). (K) The credit allowed by former Section 17053.10 (relating to Los Angeles Revitalization Zone hiring credit, repealed on December 1, 1998). (L) The credit allowed by former Section 17053.11 (relating to program area hiring credit, repealed on January 1, 1997). (M) For each taxable year beginning on or after January 1, 1994, the credit allowed by former Section 17053.17 (relating to Los Angeles Revitalization Zone hiring credit, repealed on December 1, 1998). (N) The credit allowed by former Section 17053.33 (relating to targeted tax area sales or use tax credit, repealed on December 1, 2015). (O) The credit allowed by former Section 17053.34 (relating to targeted tax area hiring credit, repealed on December 1, 2019). (P) The credit allowed by former Section 17053.49 (relating to qualified property, repealed on January 1, 2004). (Q) The credit allowed by former Section 17053.70 (relating to enterprise zone sales or use tax credit, repealed on December 1, 2015). (R) The credit allowed by former Section 17053.74 (relating to enterprise zone hiring credit, repealed on December 1, 2019). (S) The credit allowed by Section 17054 (relating to credits for personal exemption). (T) The credit allowed by Section 17054.5 (relating to the credits for a qualified joint custody head of household and a qualified taxpayer with a dependent parent). (U) The credit allowed by Section 17054.7 (relating to the credit for a senior head of household). (V) The credit allowed by former Section 17057 (relating to clinical testing expenses, repealed on December 1, 1993). (W) The credit allowed by Section 17058 (relating to low-income housing). (X) For taxable years beginning on or after January 1, 2014, the credit allowed by Section 17059.2 (relating to GO-Biz California Competes Credit). (Y) The credit allowed by Section 17061 (relating to refunds pursuant to the Unemployment Insurance Code). (Z) Credits for taxes paid to other states allowed by Chapter 12 (commencing with Section 18001). (AA) The credit allowed by Section 19002 (relating to tax withholding). (AB) For taxable years beginning on or after January 1, 2014, the credit allowed by former Section 17053.86 (relating to the College Access Tax Credit Fund, repealed on December 1, 2017). (AC) For taxable years beginning on or after January 1, 2017, the credit allowed by Section 17053.87 (relating to the College Access Tax Credit Fund). (AD) For taxable years beginning on or after January 1, 2021, the credit allowed by Section 17052.10 (relating to the elective tax under the Small Business Relief Act). (AE) For taxable years beginning on or after January 1, 2020, the credit allowed by Section 17053.98 (relating to the California Motion Picture and Television Production Credit). (AF) For taxable years beginning on or after January 1, 2025, the credit allowed by Section 17053.98.1 (relating to the California Motion Picture and Television Production Credit). (AG) For taxable years beginning on or after January 1, 2027, the credit allowed by Section 17039.5. (AH) For taxable years beginning on or after January 1, 2026, the credit allowed by Section 17052.11 (relating to the elective tax under the Small Business Relief Act). (AI) For taxable years beginning on or after January 1, 2026, and before January 1, 2036, the credit allowed by Section 17053.40 (relating to eligible transmission projects). (AJ) For taxable years beginning on or after January 1, 2027, the credit allowed by Section 17053.98.5 (relating to California Post-production Tax Credit). (2) Any credit that is partially or totally denied under paragraph (1) shall be allowed to be carried over and applied to the net tax in succeeding taxable years, if the provisions relating to that credit include a provision to allow a carryover when that credit exceeds the net tax. (d) Unless otherwise provided, any remaining carryover of a credit allowed by a section that has been repealed or made inoperative shall continue to be allowed to be carried over under the provisions of that section as it read immediately before being repealed or becoming inoperative. (e) (1) Unless otherwise provided, if two or more taxpayers (other than spouses [Text truncated for display. Full text available on Congress.gov.]