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 Bill Text - AB-2403 Income tax: credits: commercial production.

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 |Add To My Favorites |Track Bill | Version: 07/02/26 - Amended Senate
 04/13/26 - Amended Assembly
 03/19/26 - Amended Assembly
 02/20/26 - Introduced

 AB-2403 Income tax: credits: commercial production.(2025-2026)

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 Date Published: 07/02/2026 09:00 PM

AB2403:v96#DOCUMENTBill Start

 Amended
 IN 
 Senate
 July 02, 2026

 Amended
 IN 
 Assembly
 April 13, 2026

 Amended
 IN 
 Assembly
 March 19, 2026

 CALIFORNIA LEGISLATURE—
 2025–2026 REGULAR SESSION

 Assembly Bill

No. 2403

Introduced by Assembly Member Elhawary
(Coauthors: Assembly Members Schiavo, Garcia, Harabedian, Mark González, and Quirk-Silva)

February 20, 2026

An act to add and repeal Sections 17053.98.5 and 23698.5 to 17053.98.2 and 23698.2 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

LEGISLATIVE COUNSEL'S DIGEST

AB 2403, as amended, Elhawary.
 Income tax: credits: commercial production.

The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws, including numerous motion picture credits.

This bill, for taxable years beginning on or after January 1, 2027, and before January 1, 2032, would allow a credit against the taxes imposed by those laws to a qualified taxpayer that produces qualified commercials, as defined, in the state in an amount equal to 20% or 30% of the qualified production costs in excess of $500,000 that are attributable to the production of a qualified commercial, as specified. The bill would exclude any commercial that is created entirely by generative artificial intelligence, as specified, or that utilizes generative artificial intelligence, automated technologies,
 intelligence or autonomous vehicles in a manner that replaces or diminishes the job functions customarily performed by a human worker in the production. The bill would require the qualified commercial to adhere to specified labor standards. The bill would require the California Film Commission to establish an application process and allocate the credits on or after July 1 each year, in accordance with certain requirements. The bill would limit the aggregate amount of credits that may be allocated for a fiscal year under these provisions to $15,000,000. The bill would require specified certifications under penalty of perjury. By expanding the scope of a crime, this bill would impose a state-mandated local program.

Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives
 that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.

This bill would include additional information required for any bill authorizing a new tax expenditure.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

This bill would take effect immediately as a tax levy.

Digest Key

 Vote:
 MAJORITY 
 Appropriation:
 NO 
 Fiscal Committee:
 YES 
 Local Program:
 YES 

Bill Text

The people of the State of California do enact as follows:

SECTION 1.Section 17053.98.5 is added to the Revenue and Taxation Code, to read:

17053.98.5.SECTION 1.

 Section 17053.98.2 is added to the Revenue and Taxation Code, to read:

17053.98.2.

 (a) For taxable years beginning on or after January 1, 2027, and before January 1, 2032, there shall be allowed to a qualified taxpayer a credit against the “net tax,” as defined in Section 17039, subject to the requirements of this section, in an amount equal to the following, as applicable:

(1) Twenty percent of the qualified production costs in excess of five hundred thousand dollars ($500,000) that are attributable to the production of a qualified commercial, if the qualified commercial is filmed inside the Los Angeles zone, as defined in Section 17053.98.1.

(2) Thirty percent of the qualified production costs in excess of five hundred thousand dollars ($500,000) that are attributable to the production of a qualified commercial, if the qualified commercial is filmed outside the Los Angeles zone, but within the state, as defined in Section 17053