CREATE Act
- Sponsor
- Sen. Blackburn, Marsha [R-TN]
- Committees
- Finance Committee (primary)
- Last action
- Jul 30, 2025
Bottom line
The CREATE Act expands and extends tax incentives for film, television, and live theatrical productions, allowing companies to deduct more costs immediately.
What it actually does
This bill, known as the CREATE Act, amends the Internal Revenue Code of 1986 to significantly increase the dollar limits for expensing qualified film, television, and live theatrical productions. It also extends the sunset date for these expensing provisions by five years, from December 31, 2025, to December 31, 2030, and introduces an inflation adjustment for the new dollar limits.
Proponents argue
Supporters argue that expanding and extending these expensing provisions will stimulate job creation in the entertainment industry, encourage more productions to be filmed or staged within the United States, and help the domestic production sector remain competitive against international locations offering similar tax incentives. They contend it provides crucial financial relief and stability for a vital economic sector.
Opponents contend
Critics might argue that these tax incentives constitute corporate welfare, disproportionately benefiting large production studios rather than fostering broad economic growth. They may contend that such expensing provisions reduce federal tax revenue without a clear, measurable return on investment for taxpayers, and that the benefits primarily accrue to shareholders and highly compensated individuals within the industry.
The bill is short and clear, making it highly accessible for a reader to understand its provisions quickly.
Section 2(a)
Increase in Dollar Limitations for Qualified Production Expensing
This provision significantly raises the maximum amount that companies can immediately deduct (expense) for qualified film, television, and live theatrical productions. The general limit is increased from $15 million to $30 million, and the limit for productions in low-income communities is increased from $20 million to $40 million. This allows production companies to write off a larger portion of their costs upfront, reducing their immediate tax burden.
Supporters argue
Supporters assert that these higher limits are necessary to reflect the rising costs of production and to ensure that the tax incentive remains effective in encouraging domestic production. They argue it helps maintain a robust and competitive entertainment industry in the U.S.
Critics contend
Critics might argue that increasing these limits further subsidizes an already profitable industry, potentially leading to a larger tax expenditure without a proportional increase in public benefit. They may question whether the increased limits are truly necessary or if they primarily benefit high-budget productions.
Tradeoffs
The provision balances the desire to support the domestic entertainment industry and job creation against the cost to federal tax revenue and the potential for the incentive to primarily benefit larger, more established production entities.
Section 2(b)
Extension of Qualified Production Expensing Termination Date
This provision extends the sunset date for the ability to expense qualified productions from December 31, 2025, to December 31, 2030. This means the tax incentive will remain available for an additional five years, providing longer-term certainty for production companies planning future projects.
This provision introduces an inflation adjustment mechanism for the expensing dollar limits for qualified productions. Starting in calendar year 2026, the $30 million and $40 million limits will be increased annually based on the cost-of-living adjustment, rounded to the nearest $1,000.
Section 2(a)(3) (amending Section 181(a)(2) by adding subparagraph (D))
Why it matters:This is standard legislative practice for ensuring the long-term relevance of dollar amounts in the tax code, preventing their erosion by inflation. It's a technical detail that ensures the policy's intended effect persists over time.
Case for: Supporters argue that an inflation adjustment is essential to maintain the real value of the tax incentive over time, ensuring that the increased limits remain effective in stimulating production as costs naturally rise. Without it, the benefit would diminish annually.
Case against: Critics might argue that automatic inflation adjustments reduce congressional oversight and the opportunity for periodic re-evaluation of the incentive's appropriateness and cost. It locks in the benefit without requiring future legislative action.
Estimated impact: This provision ensures the tax expenditure's real value is preserved over time, leading to a continuously increasing nominal cost to federal revenue beyond the initial increase in limits.