CREATE Act
The Creative Relief and Expensing for Audio and Television Enterprises Act (CREATE Act) would expand and extend the tax incentive that allows certain film and television productions to deduct their qualified production costs in the year they begin or are completed (Section 181 expensing). Specifically, it raises the dollar caps for qualified productions from 15 million to 30 million dollars (A) and from 20 million to 40 million dollars (B), adds an inflation-adjustment mechanism starting after 2026, extends the expiration of the current 181 expensing (sunset) from 2025 to 2030, and applies these changes to productions commencing after December 31, 2025. The inflation adjustment uses the cost-of-living adjustment (COLA) method with 2025 as the base year and rounds increases to the nearest thousand dollars. In plain terms, the bill makes it financially easier for larger film and TV projects to qualify for the immediate deduction, keeps that incentive available for an additional five years, and ensures the limits keep pace with inflation.
Key Points
- 1Amounts increased: Section 181(a)(2) dollar limitations rise from 15M to 30M (subparagraph A) and from 20M to 40M (subparagraph B) for qualified productions.
- 2Inflation adjustment: Beginning in tax years after 2026, the dollar amounts will be increased each year by the cost-of-living adjustment, with rounding to the nearest thousand.
- 3Sunset extended: The termination date for the 181 expensing provision is extended from December 31, 2025, to December 31, 2030.
- 4Effective date: The amendments apply to productions commencing in taxable years ending after December 31, 2025.
- 5Scope of impact: The changes target producers of film, television, and other qualified audio-visual productions that qualify under Section 181.