Trump Pushes Federal Film Tax Incentive as Hollywood Crisis Deepens

President Donald Trump is calling on Congress to create a federal tax incentive for film and television production in what could be a major boost to Hollywood and the other drowning studio and soundstage markets in the U.S.

Trump said he is arranging meetings with leaders of both parties to start forming legislation. The president did not specify the size or structure, but a proposal backed by industry heads calls for a 20 percent credit on U.S. production labor costs.

While 39 states offer production incentives, the U.S. has no nationwide program comparable to incentives available in several competing countries.

“Congress should approve, immediately, a Federal Production Incentive to create Entertainment Jobs in America,” Trump wrote, arguing that film production has migrated to Canada and other countries. 

The push comes amid an increasingly dire environment for production space and for the entertainment industry that has defined Los Angeles and driven its economy. L.A. County shooting days fell 42 percent between their 2022 peak and 2024, while Southern California production was estimated last year to be 50 to 70 percent below its peak. At the time, roughly half of L.A.’s film and television stages were reportedly empty.

Conditions quickly translated into significant distress for studio landlords. Hackman Capital Partners defaulted on $1.1 billion in financing tied to the 1.2 million-square-foot Radford Studio Center, which Goldman Sachs subsequently took control of. Hackman and Affinius Capital had paid $1.85 billion for the property in 2021 and envisioned a $1 billion expansion.

Prominent studio complex Television City, where Hackman planned a roughly $1 billion redevelopment, has also fallen into distress, with lenders alleging the landlord owes more than $357 million on the 25-acre property.

Hudson Pacific Properties is also grappling with the production downturn and faces a $1.1 billion Hollywood studio loan maturity while its star tenant Netflix pursues Hackman’s Radford Studio Center.

Local production has continued to struggle in 2026. FilmLA reported 4,711 on-location shoot days in the second quarter, down 12.7 percent annually, while television production remained down 27.7 percent.

California already dramatically increased its response by doubling its annual film and television tax credit program to $750 million and offering credits of as much as 35 percent of qualified expenses. The expanded program generated $6.6 billion in direct production spending and supported nearly 35,000 cast and crew jobs during its first full year, according to the California Film Commission.

State lawmakers also passed a fix this week after a new $5 million annual corporate tax-credit cap threatened to undermine the program. The legislation would allow studios to cash out credits in two years rather than five, exempt independent films from the cap, and extend older credits.

But industry advocates argue state incentives alone cannot compete with foreign programs. Last year, 45 percent of U.S. films and scripted television shows were shot internationally, up from roughly one-third in 2022.

Gregory Cornfield can be reached at gcornfield@commercialobserver.com.