House and Senate lawmakers have introduced bipartisan legislation that would create a new 20% tax credit for federal film/TV production 20%, with bonus amounts raising the credit rate as high as 30%. The transferable, nonrefundable nature of the proposed credit could mark the arrival of a genuinely national market for film/TV production tax credits.
The Broader Tax Credit Transferability Market
Section 6418, which provides for federal tax credit transferability, survived the One Big Beautiful Bill Act (OBBBA), and the 2026 market for tax credits is still active. The main new wrinkle is the OBBBA's foreign entity of concern (FEOC) restrictions, which can disqualify credits tied to a prohibited foreign entity, with effective dates now phasing in across the major energy credits. The IRS issued interim guidance (Notice 2026-15) this February, although market participants are still working out how to apply it in practice, and further guidance is expected. FEOC diligence is now a standard part of energy deals, but it hasn't slowed the market's growth. BDO has previously examined trends shaping the transferable tax credit market.
It's against that backdrop that the recently introduced Motion Picture, Television, and Entertainment Revitalization Act (H.R. 10582) stands out as a notable emerging opportunity — potentially one of the first major transferable credits that could reach real scale outside energy.
An Emerging Asset Class
Film and television production credits have long been a niche corner of the broader credit market, limited to specific states. For example, Georgia offers film production credits that can be purchased by a third party at a discount, offering liquidity to producers and a tax savings opportunity to corporations with Georgia tax liability.
It is a real market — but a regional one, gated by where a production happened to shoot. H.R. 10582 could change that scope considerably.
On September 24, lawmakers introduced the bill in both chambers of Congress — a bipartisan, bicameral effort led by Reps. Nathaniel Moran (R-Texas) and Linda Sanchez (D-Calif.) in the House and Sens. Tim Scott (R-S.C.) and Adam Schiff (D-Calif.) in the Senate, with public support from President Trump. The bill would establish a 20% federal credit on production labor costs, with potential uplifts. The bonus credits would add five percentage points to the 20% baseline (up to a maximum of 30%) across four uplift categories:
- Productions in rural opportunity zones or disaster areas
- Independent productions
- Multistate producers filming in 10 or more states
- Taxpayers that show a measurable increase in domestic production.
Those categories are a nod to spreading production, and eventually credit supply, beyond Los Angeles, Atlanta, and New York.
The detail most relevant to the credit market: The current text confirms the credit would be transferable — added to the list of transferable credits in Section 6418 — but not refundable. In practice, that means no direct payment from the government but a new, nationally available asset with real transaction value.
The push has real momentum, and a clear catalyst: Trump's August 31 Truth Social post urging Congress to approve a federal incentive "immediately" is widely credited with unlocking Republican support that had been sitting on the sidelines. Trump has framed the credit as a net revenue gain, arguing the cost would be recouped "tenfold" through economic activity.
Several important hurdles to enactment remain, but the bill appears to be gaining traction. The underlying case has been building for a year, with the Motion Picture Association and entertainment unions pushing for a credit competitive with subsidies in the U.K., Canada, and Australia.
Why ‘Nonrefundable, Transferable’ Matters
Producers and film studios familiar with film state incentives will understand the implications of a non-refundable, transferable film tax credit. A refundable credit, such as New York's, functions essentially as a rebate — straightforward, but with no secondary market because there's nothing to trade. A nonrefundable, nontransferable credit is of limited use to the single-purpose entity that typically produces a film because that entity rarely carries an ongoing tax liability to offset. A nonrefundable, transferable credit occupies the middle ground that built the Georgia brokerage market: The production doesn't need its own tax liability because the credit can be sold to a buyer that does.
Apply that same structure at the federal level, and the buyer universe expands considerably — from corporations with Georgia state tax exposure to, in principle, any U.S. corporation or high-income filer with a federal tax liability. That is a meaningfully different order of scale. Productions that currently must find matches with in-state buyers could soon have access to buyers nationwide — and the pricing, diligence, and deal structures built for a state-by-state market might need to evolve.
A Second Layer: Stacking Federal and State Incentives
The proposed legislation offers another key benefit: According to the bill's sponsors, the federal credit is designed to stack on top of state incentives rather than replace them. A production shooting in Georgia, for example, could theoretically layer a 20%–30% state credit with a 20%-30% federal credit against the same qualified labor spend. For the secondary market, that implies two distinct credits generated by a single production, a meaningful increase in the supply of tradable credits without a corresponding increase in production volume. Deal structuring, and the related diligence, will likely need to account for both simultaneously.
California is worth watching closely. The state's own program — now a 35% base credit under Program 4.0, backed by a $750 million annual pool — is largely nontransferable; only the independent-film track can be sold to a third party. A transferable federal credit stacked on top of that would, for the first time, give many California productions access to a liquid instrument, even though their underlying state credit still can't be sold. That's a different setup than Georgia, where the state credit itself is already tradable, and it could make California productions disproportionately eager participants in a new federal market.
BDO's Take
If enacted with transferability intact, the proposed legislation could do more than create a new federal incentive for film and television production: It could create one of the first large-scale transferable federal tax credit markets for an industry other than energy, bringing together production companies seeking liquidity and corporate taxpayers seeking federal tax-planning opportunities.
Practically, that means production studios could monetize credits without needing sufficient tax liabilities to use them directly, while prospective buyers could gain access to a new category of federal tax credits not tied to energy, manufacturing, or carbon projects. That has the potential to expand both the supply of transferable credits and the universe of buyers participating in the market.
For production companies, the immediate takeaway is that transferability could become an important financing and cash-flow tool if the legislation advances. For corporate taxpayers, the proposal represents a potential new source of federal tax credits that could complement existing transferable credit acquisition strategies.
While significant uncertainty remains, including the appropriate legislative vehicle, organizations on both sides of the market should begin evaluating how a federal film and television credit could fit within their broader capital, tax, and transaction planning objectives. BDO is monitoring developments closely and can help companies assess structuring considerations, monetization strategies, and market timing as the legislation evolves.
Organizations evaluating the potential impact of a federal film and television production credit should monitor legislative developments closely, and can consider reaching out to lawmakers to describe how meaningful enactment would be to encouraging film production in the United States. To learn more about tax credit transferability and monetization strategies, visit BDO's Tax Credit Monetization page or contact a BDO Capital Advisors professional.
This perspective reflects BDO's analysis of the Motion Picture, Television, and Entertainment Revitalization Act as introduced in Congress on September 24, 2026. Terms discussed here — including transferability and interaction with state incentives — remain subject to change as the bill moves through committee and any subsequent legislative process. Organizations should consult their BDO tax advisors for guidance specific to their circumstances.
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