California lawmakers have finalised a compromise that partially shields film and television incentives from the state’s new tax-credit cap, with the Motion Picture Association and entertainment unions backing the agreement. The developing deal is expected to pass by Monday’s midnight deadline and matters because it eases pressure on California productions without granting the industry the full exemption it sought.

AB 186 fully exempts independent-film credits, representing 10% of California’s $750 million incentive programme, while studios choosing cash refunds will wait two years rather than five and face a 5% discount instead of 10%. The state otherwise limits corporate tax-credit claims to $5 million annually for three years; the legislation also extends certain unused pre-2025 credits by up to five years, but drops a proposed measure to make sales-tax credits easier to claim.