In a strategic move to rejuvenate its animation industry, California has introduced Senate Bill 630, proposing a 35% tax credit for animated features, series, and shorts produced within the state. This initiative aims to counteract the trend of animation production shifting overseas and to reestablish California as a premier hub for animation.
Historically, California’s tax incentives favored live-action productions, offering credits between 20-25%. Senate Bill 630 not only increases this rate to 35% for qualifying animation projects with budgets exceeding $1 million but also expands the annual cap on the credit program from $330 million to $750 million.
The bill’s introduction comes at a time when major studios like Walt Disney Animation Studios and DreamWorks Animation have relocated significant portions of their production outside California, leaving Pixar as the sole studio conducting end-to-end feature animation exclusively in the state. By offering competitive incentives, California aims to attract productions back, fostering local employment and economic growth.
While the bill is expected to pass, its impact will depend on the finalization of the state’s 2025-2026 budget and the approval of the increased funding cap. Industry stakeholders are closely monitoring the bill’s progress, hopeful that it will stimulate a resurgence in California’s animation sector.