Motion Picture, Television, and Entertainment Revitalization Act
- Sponsor
- Rep. Moran, Nathaniel [R-TX-1]
- Committees
- Ways and Means Committee (primary)
- Last action
- Sep 24, 2026
Bottom line
This bill creates a significant new federal tax credit to boost domestic film, television, visual effects, and post-production industries by subsidizing qualified compensation for U.S.-based services.
What it actually does
This bill establishes a new federal tax credit for American film and television productions, including specific provisions for visual effects and post-production activities. It offers a base 20% credit on qualified compensation for services performed in the United States, with potential increases up to 30% for productions in rural qualified opportunity zones, disaster areas, by independent producers, multi-state producers, or those increasing domestic production.
Proponents argue
Supporters argue this credit will revitalize the American entertainment industry, create jobs, stimulate local economies, and encourage productions to remain or return to the U.S., especially in underserved areas. They contend it will make the U.S. more competitive globally against countries offering similar incentives.
Opponents contend
Critics might argue that such tax credits primarily benefit large corporations and wealthy individuals in the entertainment industry, potentially leading to a 'race to the bottom' among states and countries, and could be an inefficient use of taxpayer money that distorts market forces rather than fostering organic growth.
The bill is moderately detailed, requiring careful reading to understand the various credit tiers and definitions, but is manageable for an informed reader.
Sec. 1
Short Title
This section establishes the official short name for the bill, making it easier to refer to and identify in public discourse and legislative processes. The bill will be known as the 'Motion Picture, Television, and Entertainment Revitalization Act'.
Supporters argue
A clear and concise short title helps in public communication and legislative tracking, reflecting the bill's intent to revitalize the entertainment sector.
Critics contend
No specific opposition is typically raised against this provision because it is administrative.
Tradeoffs
None inherent in the short title itself.
Sec. 2(a), adding new IRC Sec. 45BB(a)-(c)
Establishment of American Film and Television Production Credit
This section introduces a new general business tax credit for qualified film and television productions. The credit amount is calculated as an 'applicable percentage' (starting at 20%) multiplied by 'qualified compensation' paid for services performed in the United States. It defines 'qualified film or television production' as feature films, TV pilots, or seasons, produced commercially, with costs over $1,000,000, and 75% of principal photography days in the U.S. It also lists several exceptions, such as adult entertainment, talk shows, news, live sports, social media content, advertising, fundraising, or industrial productions. 'Qualified compensation' includes wages for actors, production personnel, directors, and producers for services performed in the U.S., excluding participations and residuals.
Sec. 2(a), adding new IRC Sec. 45BB(d)
Tiered Credit Increases for Specific Production Types and Locations
This section details how the base 20% credit can be increased, up to a maximum of 30%. It provides a 5 percentage point increase for productions where 30% of principal photography days occur in rural qualified opportunity zones or federally declared disaster areas. Another 5 percentage point increase is available for productions by 'independent producers' (defined as non-publicly traded entities not majority-owned by publicly traded corporations). A further 5 percentage point increase is granted to 'multi-State producers' who meet specific thresholds for production activity and qualified compensation in 10 or more states. Finally, an additional 5 percentage point increase is for taxpayers who significantly increase their number of qualified domestic productions relative to their foreign productions over a defined 'start year' and subsequent taxable years.
Sec. 2(a), adding new IRC Sec. 45BB(e)
Credit for Visual Effects Productions
This section extends the tax credit to 'qualified visual effects productions,' even if the principal photography does not meet the 75% U.S. location requirement. For these productions, only compensation for U.S.-performed visual effects services is considered. The base 20% credit can be increased by 5 percentage points if 30% of the qualified visual effects compensation is for services in rural qualified opportunity zones or disaster areas, or if the production is completed by an independent producer. 'Visual effects' are defined as digital or in-camera creation, alteration, or enhancement of images, excluding scientific research.
Sec. 2(a), adding new IRC Sec. 45BB(f)
Credit for Post-Production Projects
Similar to visual effects, this section extends the tax credit to 'qualified post-production projects' even if the main production did not meet the 75% U.S. principal photography requirement. Only compensation for U.S.-performed 'traditional post-production activities' (editing, sound, scoring, dubbing, etc., excluding VFX and marketing) is considered. A 5 percentage point increase is available if 30% of qualified post-production compensation is for services in rural qualified opportunity zones or disaster areas, or if the production is by an independent producer.
Sec. 2(a), adding new IRC Sec. 45BB(g)
Key Definitions and Basis Adjustment
This section provides crucial definitions for terms used throughout the credit, such as when a production is 'completed' (final composite answer print/digital cinema file), 'television season' (at least 4 narrative/thematically related episodes within 12 months, treated as a single production), 'principal photography day,' and 'principal photography' (the period of main filming with director, actors, and first unit crew, including reshoots). It also mandates a basis adjustment, reducing the basis of the qualified production property by the amount of the credit received.
Sec. 2(b)
Transferability of the Credit
This amendment adds the new American film and television production credit to the list of credits that can be elected for transfer under Section 6418(f)(1)(A) of the Internal Revenue Code. This means that an eligible taxpayer can elect to transfer the credit to an unrelated third party for cash, providing flexibility for companies that may not have sufficient tax liability to fully utilize the credit themselves.
For animated productions, the location of 'principal photography' is determined by where animation production activities (keyframe, in-between, photography, voice acting) are performed, based on the ratio of U.S. costs to total costs. Hybrid live-action/animation productions can meet the 75% U.S. location rule based on either live filming days or animation activity location.
Section 2(a), adding new IRC Sec. 45BB(b)(3)
Why it matters:Standard legislative practice to provide specific rules for different production types within a broad definition.
Case for: Supporters argue this is crucial for accurately reflecting the domestic contribution of animated projects, which often have distinct production pipelines compared to live-action films. It ensures that animation studios and artists in the U.S. can benefit from the credit.
Case against: Critics might suggest that this complexity could lead to difficulties in auditing and verifying the 'location of animation production activities' and associated costs, potentially creating avenues for creative accounting.
Estimated impact: Significantly expands the scope of eligible productions to include a major segment of the entertainment industry, potentially incentivizing substantial animation work in the U.S.
For determining if a taxpayer is an 'independent producer' (and thus eligible for a 5% credit increase), all taxpayers treated as a single employer under subsection (a) or (b) of section 52 of the Internal Revenue Code are treated as a single taxpayer.
Section 2(a), adding new IRC Sec. 45BB(d)(3)(B)(ii)
Why it matters:Standard legislative practice to prevent abuse of definitions by structuring related entities separately to qualify for benefits.
Case for: Supporters argue this prevents large, publicly traded corporations from artificially segmenting their operations to appear as 'independent producers' and claim the additional credit intended for smaller, truly independent entities.
Case against: No specific opposition, as it's a common anti-abuse rule in tax law. Some might argue it adds complexity for legitimate small groups of related entities, but the intent is clear.
Estimated impact: Prevents potentially significant revenue loss from large entities claiming credits not intended for them, ensuring the independent producer incentive targets its intended beneficiaries.
If a credit is determined for a qualified film or television production, the basis of that property must be reduced by the amount of the credit.
Section 2(a), adding new IRC Sec. 45BB(g)(4)
Why it matters:Standard legislative practice for tax credits to prevent taxpayers from receiving a credit and then also depreciating the full cost of the asset, effectively getting a double tax benefit.
Case for: Proponents argue this is a necessary accounting measure to ensure fiscal responsibility and prevent 'double-dipping' on tax benefits, maintaining the integrity of the tax code.
Case against: While standard, some might argue that it slightly diminishes the overall financial benefit of the credit by reducing future depreciation deductions, making the net benefit marginally less attractive.
Estimated impact: Ensures accurate accounting of the tax benefit, preventing unintended revenue loss from double benefits.