Trump’s Hollywood Tax Credit Could Bypass Broadway

President Donald Trump pointing during a meeting in the Oval Office of the White House on September 02, 2026 (Photo by Kevin Dietsch/Getty Images)

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The campaign to make Hollywood great again could leave Broadway out of the picture.

Last week, President Donald J. Trump called for federal legislators to “immediately craft Legislation to save the Movie, Television, and Entertainment Business in America.” “Congress should approve, immediately, a Federal Production Incentive to create Entertainment Jobs in America,” he wrote, insisting that the “amount of money spent on Tax Incentives will be made up tenfold by the money pouring into the Treasury’s coffers.”

It is believed that Representatives Nathaniel Moran and Linda Sanchez are now preparing legislation to provide a 20 percent tax incentive for American film and television productions with additional bonuses for productions shot in rural areas. The federal tax incentive would be available in addition to state tax credits in the hopes of making the United States a more appealing place to create content than countries like the United Kingdom, Canada, and Hungary, which offer general government subsidies and lower labor costs. “[V]ery little work being done anymore in the United States,” complained President Trump.

Broadway could benefit from a federal tax incentive, too.

“If the objective of the proposed federal production incentive is to support American entertainment jobs and encourage investment in content produced in the United States, it makes sense to consider live theater as part of that conversation, as well,” argued NYU business professor Paul Hardart. “Like film and television, live theater is incredibly labor and capital intensive,” he said. “Every new production employs not only actors, writers and directors, but stagehands, designers, musicians, costume makers, technicians, marketing teams, and many others,” he continued, adding that “the economic impact extends well beyond the theater itself to restaurants, hotels, transportation and tourism.”

The argument against extending tax credits to Broadway has always been that the industry cannot move, as all 41 Broadway theaters are located in New York. “Where’s Broadway going to go?” often asked Mayor Ed Koch, before wondering “New Jersey?”

Gerald Schoenfeld, the late chairman of the Shubert Organization, which owns 17 Broadway theaters, used to complain that “Morgan Stanley can threaten to leave the city and get millions and millions in tax breaks” and the “Yankees can threaten to leave the city and get millions and millions of dollars in tax breaks.” But, he said that “[w]e get nothing because we can’t threaten to leave the city.”

While Broadway theaters might not be able to move, a lot of Broadway money has been moving to the West End of London.

“I’m seeing more and more American producer-investors over here,” noticed Nica Burns, the chief executive of Nimax Theaters, which owns seven West End theaters. With a generous tax relief program covering up to 40% of qualified production costs for non-touring theatrical productions, she commented that the West End “economic model is so much better.”

As production costs continue to skyrocket on Broadway, the cost of mounting a show in London is now about three to five times less than the cost of mounting the same show in New York. For example, the musical Operation Mincemeat cost £2 million (about $2.7 million) to produce in London and $11.5 million to produce in New York.

As a result, more and more Broadway producers have chosen to develop shows across the pond. “London is very busy with American producers who are looking for better value,” observed British producer Matthew Byam Shaw. Jobs that could be going to American casts and crews are now going to British casts and crews.

Adding Broadway to the bill should not be complicated.

“Live theatrical productions have previously been included alongside film and television under Section 181 of the federal tax code,” indicated professor Hardart. “So, including theater in a new production incentive would not be an entirely new concept,” he said.

Nevertheless, any statute will need bipartisan support to get enacted, and Democrats and Republicans are seldom on the same page. In fact, a record-breaking number of votes cast in the U.S. Congress last year pitted the political parties against each other.

Yet, some people are hopeful that both sides can come together to help the entertainment industry and themselves. “Our governor is on a vote-buying binge, so maybe enough members of Congress will be of similar mind and we may see a federal program emerge,” acknowledged theatre accountant Christopher Cacace of CBIZ.