American Entertainment Alliance Backs 20% U.S. Production Tax Incentive

By Elena Vasquez

A 20% federal tax incentive for domestic film and television production has the backing of a new Hollywood coalition. The American Entertainment Alliance (AEA) said Thursday that the proposal is a first step toward an industry recovery. The group also said more must be done to revive the industry.

What does the AEA support?

The AEA includes three named talent agencies and three named independent producers:

• Talent agencies: CAA, WME and UTA.
• Independent producers: Blumhouse, Imagine Entertainment and MRC.

The coalition described its support for the incentive as strong. It will seek targeted changes that make the proposal more favorable for independents.

“This legislation is an urgent first step toward bringing production jobs home, and with targeted adjustments, it can also help level the playing field for independent producers,” the AEA said.

The AEA said it would work closely with lawmakers and industry partners to strengthen the bill and shepherd it through the legislative process.

The alliance's wider agenda could complicate the campaign, even as the proposed 20% incentive retains broader industry backing and advocates hope Congress will pass it by year's end.

The coalition backs the incentive and wants changes that favor independent producers.

How would independent productions benefit?\n

Current bill language provides a 5% bonus for independent productions. It defines an independent producer as any company that is not publicly traded. The AEA is also seeking to revive fin-syn rules, which allowed independent television producers to thrive in the 1970s and 1980s.

The AEA says it wants production incentives paired with a modern approach to creative ownership for the streaming era, allowing creators to retain and reinvest the long-term value of their work.

The proposal adds a 5% bonus, while the coalition seeks broader changes for independent production.

What happens with streamers?

The AEA announced its existence last week through a New York Times story. Agents and producers in that story called for two legislative changes:

• Require streamers to buy 50% of their original content from independent production companies.
• Set time limits on exclusivity windows.

The AEA says the 50% purchase requirement and exclusivity-window limits are needed to restore competition and creativity, but neither appeared in the federal tax credit bill introduced in Congress in September.

The ideas have circulated for the past year. The AEA says it will pursue them on a separate path in the next Congress.

The AEA will pursue the streaming demands separately in the next Congress, outside the tax credit bill.

What could complicate passage?

The alliance's fin-syn campaign could complicate the push for the 20% incentive.

“A tax credit alone will not restore a competitive American marketplace,” the group said.

The AEA said it would pursue both production incentives and a modern approach to creative ownership for the streaming era. The AEA said those policies would expand opportunities for independent producers, strengthen competition and let creators retain and reinvest the long-term value of their work. The group also plans to work with lawmakers and its counterparts in the 120th Congress.

The proposed 20% incentive retains broad industry support, yet the AEA says production incentives cannot by themselves restore a competitive American film and television marketplace.

The AEA will seek amendments while pursuing separate streaming legislation in the next Congress.