This bill amends the Tax Reform Code of 1971 to enhance tax credits related to film and digital media production in Pennsylvania. It introduces a new definition for "Digital media company" and significantly increases the cap on tax credits from $100 million to $400 million per fiscal year. The bill also revises the percentage of tax credits available for film production expenses, allowing for a 30% credit for projects under $50 million and a 35% credit for those at or above that threshold. Additionally, it establishes a small production reserve for Pennsylvania-based companies and introduces a retention credit pilot program for creative professionals, which will provide tax credits for individuals committed to long-term projects in the state.

Furthermore, the bill mandates annual audits by the Auditor General to ensure compliance with tax credit provisions and includes a formal review process for assessing the scalability of tax credits for gaming and immersive media. It also creates a new subarticle dedicated to creative professionals, outlining the application process for tax credits, limitations on the total amount awarded, and penalties for breaches of contract. The act is set to take effect immediately and will apply to taxable years commencing on or after December 31, 2025.

Statutes/Laws affected:
Printer's No. 2183 (Aug 04, 2025): P.L.6, No.2