ARIZONA FILM INSIDER - DECEMBER 2025

A NOTE FROM THE PRESIDENT

Hey 2026, we sure hope you’ll be kind to the Arizona film community.

The last few years have not been very nice to us. It took years of lobbying and advocacy to pass our film incentive. Unlike other states’ “project-based” models, our incentive was designed to foster a permanent film industry – a model that did not sit well with established industry players. And our timing was not great, just as soon as the incentive became law we hit a perfect storm.

First, a series of labor strikes. Then the industry came to a screeching halt with an oversaturation of streamers and the uncertainty about AI. And if that wasn’t enough, the Goldwater Institute sued Arizona over our incentive. Boy, that’s been bad for business. The good news, we won. So, it’s now time to say goodbye to 2025 and hello to the optimism of a new year.

Yes, the industry is changing – but change means opportunity. While some see turmoil in the global structure of the film industry, Arizona just may be in the right place at the right time. We have an amazing history in the film industry because this is an amazing place to make films and television. Weather, lifestyle, locations, crews, cast, and so much more are perfect for the business of storytelling. And now, we have an incentive designed to attract and build a permanent industry right when our industry is looking new options and opportunities.

They say only the prepared get lucky – and after years of preparation and hard work, it may finally be Arizona’s turn. We hope you have a great 2026.

Randy Murray - AFC President

INSIDE THE AZ LEGISLATURE

All roads lead back to the Legislature.

As we move closer to the start of session on January 12th, several issues are already emerging as likely flashpoints, and potential roadblocks, to a smooth adjournment. While the Legislature’s work is never free from unexpected curveballs that can derail priorities and consume political capital, the following represents the first major issue we anticipate will dominate the early weeks of session:

Federal Tax Conformity

The first major battle of the 2026 legislative session is expected to center on federal tax conformity. In November, Governor Hobbs issued an executive order launching her Cutting Taxes for Hard Working Arizonans initiative, directing the Arizona Department of Revenue to update 2025 tax forms to reflect the higher federal standard deduction enacted under H.R. 1. The order further requires ADOR to provide guidance for taxpayers on claiming anticipated deductions for tips, overtime, car loan interest, and enhanced senior deductions, assuming the Legislature codifies these elements into law.

Republican leadership has signaled since July that they intend for Arizona to conform with federal tax changes and may push for retroactive conformity to apply to 2025 earnings. While this suggests some alignment, Governor Hobbs’ proposed deductions do not fully match former President Trump’s “Big Beautiful Bill,” creating early friction. Layered onto this political tension is Arizona’s increasingly constrained revenue outlook. According to the Joint Legislative Budget Committee, full conformity with federal changes carries an estimated cost of $318 million, with another $57 million in possible impacts, a significant burden within the state’s $17.6 billion budget.

For these reasons, tax conformity is positioned to become one of the earliest, and likely one of the most contentious, debates of the 2026 session.

Water & the Arizona Film Industry: Why the Colorado River Negotiations Matter

Colorado River negotiations hit another standstill this month, and while that may sound far from the film world, Arizona’s creative community is absolutely tied into what happens next. Our major cities,  Phoenix, Tucson, and many fast-growing communities, rely heavily on Colorado River water to keep homes, businesses, and infrastructure running smoothly. With the river shrinking and the states unable to reach a new agreement for post-2026 management, experts warn that utilities may face tougher decisions about conservation, long-term water planning, and future infrastructure investments. That could translate to higher water rates and increased costs for everyone, including productions filming here in Arizona. Without a negotiated plan, the federal government is expected to impose its own framework, leaving Arizona cities with little certainty about future supply volumes. Ensuring a stable water future is essential not just for residents, but for the continued growth of Arizona’s film industry and the vibrant and varied communities that support it.

INSIDE FILM TUCSON

Our office recently assisted an array of film productions, all of which showcased the unending versatility of our region while employing dozens of our home-grown dependable crew:

• Elle Magazine, who utilized the romantic allure of our historic Barrio Viejo in their fashionable pages.

• Barrio Viejo also wound up as a backdrop for an upcoming advertising campaign for the marketing team at Marriott Hotels & Resorts.

• Meanwhile, the director of Silence of Waves, a short film from Belgium, used the locations of Sasabe, AZ and King's Anvil Ranch.

  
  

INSIDE PHOENIX FILM OFFICE

Help Us Showcase the True Impact of Greater Phoenix's Film Industry

Every six months, the Phoenix Film Office conducts a critical survey of all Greater Phoenix production companies and your participation is essential. This data doesn't just sit in a file; it demonstrates the real economic and creative impact of our thriving film industry to stakeholders, policymakers, and potential clients.

While our office tracks projects through our permitting portal, we know that's only part of the story. Many projects don't require permits or film in neighboring cities, which means they go uncounted.

Without your input, we're missing crucial data that could strengthen support for our industry. By self-reporting your projects, no matter the size, you help us paint the most accurate picture possible of what our industry contributes to the region.

Production companies in Greater Phoenix should have already received the survey. If you haven't, or if you need it resent, please email Philip.bradstock@phoenix.gov immediately to be added to the list.  Here is the link to last years year end report:

https://www.investinphoenix.com/Documents/Film-Office-FY-Report_01_25-FINAL.pdf

In other news, the Phoenix Film Office recently joined the State, Tucson, and Sedona Film Offices at the American Film Market in Los Angeles, where Arizona maintained the largest US presence among regional exhibitors. The team connected with numerous industry professionals and is following up on promising opportunities for productions in our state.

INDUSTRY BITS

The University of Arizona School of Theatre, Film & Television is ranked No. 4 among public film schools by The Wrap on its annual "Top 50 Film Schools in the U.S." list.