The credit allows producers to cut up between $15 million and $20 million for film shoots on sites that meet the bill's criteria as low-income neighborhoods
A bill that kept the United States from the fiscal cliff contains a provision that extends for another year tax credits on Hollywood productions.
The tax incentives, first implemented in 2004, were included in the bill drafted and approved by the Senate and passed by the House late Tuesday.
The credit allows producers to cut between $15 million and $20 million for film shoots on sites that meet the bill's criteria as low-income neighborhoods.
The tax incentives give television producers particular reason to celebrate, as it allows each episode of a show to be treated as a separate production for up to 44 episodes.
The incentives were first championed by Republican senators Olympia Snowe and Orrin Hatch and their Democratic colleagues Blanche Lincoln and Max Baucus (left).
The Motion Picture Association of America applauded the renewal of the tax incentives on Wednesday.
“The film and television industry is a vital component of the nation’s overall economy, has a positive balance of trade with virtually every country in the world, and has been a significant contributor to growth in our economy," the MPAA said in a statement to TheWrap. "2.1 million American workers are employed as a result of the American film and television industry, and our industry is responsible for $137 billion in total wages to American workers. A strong American film industry contributes to a strong American economy.”