Texas is muscling further into the filming business with the kind of bold bet usually reserved for a summer blockbuster.
Lawmakers in the Lone Star State approved a $1.5 billion incentive package to help lure movie and television filming to the region over the next decade, putting a spotlight on the increasing national competition for productions.
Beginning Sept. 1, the Texas Moving Image Industry Incentive Program, or TMIIIP, is set to award $300 million every two years to qualifying productions until 2035 after legislators passed Senate Bill 22 that also lowers some thresholds for projects to qualify. While TMIIIP has supported more than 1,200 projects and is credited with generating billions of dollars in local spending and employment since 2017, this is the first time the program has secured long-term funding.
“It is a game changer,” said John Boyd, a principal at The Boyd Co. who advises film and television clients on site selection across the country. “It puts Texas and its superior business climate at the forefront of this second war between the states for the coveted film and TV production industry.”
Even though Texas film incentives are getting a boost from the legislation, the funds are still less than those at established entertainment production powerhouses like California, where lawmakers recently agreed to more than double annual incentives to $750 million per year.
But not everyone in the film industry in Texas is optimistic about the newly approved funds.
"You're not going to see a lot of film studios pop up in Texas," ATX Film Studios Principal Stephen Bieneman told CoStar News. "You aren't guaranteed tenants in Texas."
Texas and California join other states — such as New York, Georgia and New Jersey — ramping up their film incentives as more content producers focus on financial frugality, opting to film in cheaper locales outside the United States. The five most sought-after filming destinations in the next year are outside the United States, according to industry tracker ProdPro, with Toronto, Vancouver, the United Kingdom, Central Europe and Australia coming out on top.
Texas' program comes with a creative caveat. Unlike most incentive programs, Texas retains the right to deny funding to projects it deems unflattering to the state or its people. That's a policy upheld by the 5th Circuit Court of Appeals in 2015 after the state rejected funding for "Machete Kills," a film critical of hardline immigration enforcement.
Texas’ revised incentive program introduces a tiered structure based on in-state spending and wages, lowers the minimum threshold for hiring Texas residents and offers bonuses for productions that deliver broader economic or community impact. One such bonus rewards projects that spend at least 35% of filming days in counties with fewer than 300,000 residents. While the program removes per-project caps, a cap on total reimbursements remains in place to control public costs, making Texas more generous than most states but still less competitive than Georgia, where incentives are uncapped.
“This is the single-largest investment in job creation in the Texas media production industries in the history of our great state,” said Stephanie Whallon, director of the Texas Film Commission, in a statement from the state agency that supports media production in Texas.
There are limits to what the new funding can do. Industry professionals point out that it can be costly to set up production in areas that don't already have facilities — expenses that could exceed the benefits of the incentives.
Rewriting the script
Even so, the Texas incentive expansion is being reinforced by a wave of real estate development aimed at making the state a long-term production base. Across Central and North Texas, developers are building out modern soundstages, virtual production facilities and mixed-use studio campuses designed to compete with legacy film hubs. The increased incentives for producers are expected to help fill those soundstages and editing suites.
In Bastrop in Central Texas, Line 204 Studios is planning an eight-stage campus spread across 600 acres, backed by an initial $50 million investment. In San Marcos, Hill Country Studios expects to break ground soon on a 12-stage, 800,000-square-foot production complex expected to serve large-scale streaming and studio projects.
Fort Worth is also emerging as a production hub, anchored by property developer Hillwood’s AllianceTexas development. Hillwood leased nearly 450,000 square feet to producer and director Taylor Sheridan’s production company across two industrial buildings that are now housing eight soundstages for the Paramount series "Landman" and other projects. The facilities were built on spec and later nominated as qualified media production locations under Texas’ film incentive rules.
"We have wanted to promote Fort Worth as a film destination, but it was Taylor Sheridan who kicked it off," Ross Perot Jr., chairman of Hillwood, told CoStar News in an interview last month.
The state's so-called Media Production Development Zone Act was set up in 2009 by the Texas Legislature to encourage the development of permanent moving image production sites. The law gives a two-year use and sales tax exemption for the construction, maintenance, expansion, improvement and renovation of media production facilities.
The build-out of purpose-built facilities across multiple markets and the new long-term incentives give developers a clearer road map and a stronger case for investment, Chase Musslewhite, co-founder of advocacy group Media for Texas, said in a statement.
While states like Georgia and New Jersey have had incentive programs for years, a number of their facilities are concentrated in a single metropolitan area. The Texas model of distributed regional hubs may appeal to producers seeking flexibility, availability and lower-cost alternatives to crowded legacy markets, according to Musslewhite.
Not a cure
Even with Texas' new incentives, Bieneman with ATX Film Studios said he doesn't think it's enough to sway Hollywood to the Lone Star State.
Sheridan "can make it work because he got a sweet deal from the landlord and Paramount. He's also got Texas-based shows, and he can make his business work all day long," Bieneman added. "He's one of the best things to ever hit Texas, but he's a complete outlier. He's a unicorn of unicorns. I don't believe anybody else can make it work."
It's costly to build a new film studio, and studio heads want to make sure every dollar counts when making movies, Bieneman said.
ATX Film Studios, with about 237,000 square feet of turn-key production studio space in Austin, works because "we haven't had debt on the place in 15 years," Bieneman said. The studio is where "Brothers," starring actors Matthew McConaughey and Woody Harrelson, is being filmed.
With "Brothers," Bieneman said his studio is about half full at the moment with tenants. And, even with having no debt on the property, he said the annual property taxes on the $18.2 million property are steep.
"We make it work because we don't have any debt on the property and we don't care," he added.
Sticking with Texas
Texas has long hosted high-profile film and TV productions, but some have been lost to other states offering more aggressive incentives. Supporters of SB 22 hope permanent funding will help reverse that trend and keep more projects — and jobs — local.
Recent productions filmed in Texas include "Walker" for the CW, HBO’s "Love & Death," and the DIY Network's "Texas Flip N Move" reality show.
Meanwhile, Sheridan's "1883" miniseries was filmed in Texas in 2021 and received $10 million in incentives under previous iterations of the state's grant program for creating 1,955 Texas jobs, according to public records. But the "Hell or High Water" movie written by Sheridan was shot in New Mexico in 2015 — even though most of the plot takes place in West Texas — because of a lack of incentives at the time.
Sheridan has testified in support of increasing film incentives in Texas and told legislators that without incentives, studios won’t finance most projects.
“They cannot and will not finance a film without an incentive from a state,” Sheridan said at a legislative hearing in March. “They will not do it.”
Texas’ inconsistent incentive funding in past years made it difficult to plan long term. Officials hope that by guaranteeing support through 2035, the new legislation will give producers the confidence to develop repeat business and longer-term leases.
The Texas Film Commission is preparing to roll out the revised program rules ahead of the Sept. 1 effective date, with applications opening in the fall and decisions on who gets funding expected once administrative guidelines are finalized.
State against state
Texas’ new incentive program puts it in closer competition with national leaders like Georgia, a state that offers an uncapped 30% credit and continues to dominate U.S. production volume. New York also provides a 30% refundable credit with one of the highest annual funding caps in the country at $700 million, plus additional bonuses for postproduction and filming in upstate regions.
New Jersey and Louisiana each offer up to 35% or 40% in credits depending on location and spending type, while New Mexico provides similar rates with bonuses for rural shoots and use of qualified facilities.
California now reimburses 20% to 25% of qualified production costs under a newly expanded, $750 million annual cap, more than doubling the previous limit, as part of a 2025 effort by Gov. Gavin Newsom to keep pace with rival states and revive in-state film and TV production.
Soundstage occupancy in Los Angeles dropped to 63% earlier this year, down from over 90% before the pandemic and industry strikes. Local industry tracker FilmLA has reported declines in both scripted television and feature-film shoots.
Supporters of Newsom’s expansion hope a larger, more accessible tax credit program will help stabilize the market. Newsom has also proposed a $7.5 billion federal incentive program modeled on California’s approach to level the playing field with international markets that offer richer incentives and easier access.
“California didn’t earn its role as the heart of the entertainment world by accident — it was built over generations by skilled workers and creative talent pushing boundaries," Newsom said in a statement last month from the governor's office. “Expanding this program will help keep production here at home, generate thousands of good paying jobs and strengthen the vital link between our communities and the state’s iconic film and TV industry.”