The Nevada Senate rejected the bill to massively expand Nevada’s film tax credit system on  Wednesday evening, killing the star-studded, multiyear effort from major movie studios to supercharge the state’s film industry.

Ten out of 21 senators supported the bill, failing to meet the majority threshold. Three senators were absent. Sources familiar with the negotiations said another vote is not expected before the end of the Legislature’s special session.

The heavily lobbied bill would have put Nevada on the hook for $120 million in annual transferable tax credits to film companies for 15 years beginning in 2029. Proponents had touted its potential to create construction jobs and an increase in funding for Clark County’s pre-K program, though both sides agreed that it would not bring a positive return on investment for state coffers, and legislative staff had estimated the state budget would likely go into the red once the credits were issued.

The failure of the bill — widely considered the raison d'etre of the special session — marks a significant defeat for Republican Gov. Joe Lombardo, who was expected to sign it. It’s also a loss for other bill proponents, including construction trade unions and bill sponsor Assm. Sandra Jauregui (D-Las Vegas), who is running for lieutenant governor next year.

“I did everything I could to make my case, and it just didn't have the votes,” Jauregui told The Indy after the Wednesday vote. “You lose with grace.”

It is a victory for progressives and conservatives who formed an unlikely alliance to kill the bill. There was a failed effort in the Assembly to kill the bill on the first day of the special session using a little-known procedural move. The bill narrowly passed the Assembly on Sunday 22-20, but it needed approval from the Senate for it to reach Lombardo’s desk.

The bill’s defeat could have political implications for next year.

In a statement, Lombardo said “I appreciate thoughtful policy discussions about how to bring new, good-paying jobs to Nevada and further diversify our economy.”

“Since taking office, my administration has been focused on expanding opportunity and attracting new industries to our state, so that future generations of Nevadans can build their lives and careers right here at home,” the statement said. “Nevada is open for business, and my administration will continue to fight for Nevada to be a competitive, innovative, and prosperous place for all who call it home.”

Washoe County Commissioner Alexis Hill, a Democrat who is running for governor and has been a vocal critic of the credits, said in a statement that it “is a victory that belongs to everyday Nevadans.” 

“The students who spoke out, groups like AFSCME, teachers, and community members made their voices heard, and we won,” the statement said. “I am proud to have been a part of this coalition. This shows what we can do when we work together, that there is still hope in this dark political time we find ourselves in if we stand up and stand together.”

The gubernatorial campaign for Nevada Attorney General Aaron Ford, a Democrat who spearheaded the bill in 2013 that created the film tax credit program, did not immediately respond to a request for comment.

For days, supporters of the proposal — who tend to hold major sway in the legislative building — tried to convince holdout senators behind the scenes to support it, but their efforts ultimately failed.

Sources familiar with the negotiations said the Senate vote came down to three lawmakers who ultimately voted no: Sens. Edgar Flores (D-Las Vegas), Melanie Scheible (D-Las Vegas) and Angie Taylor (D-Las Vegas).

After the special session ended, Taylor told The Indy that the decision was “grueling.”

“We know we need economic development. We certainly, absolutely know that we need the jobs,” she said. “I just couldn’t get comfortable with the numbers.”

Fiscal impact

It underwent significant changes throughout the legislative process — the initial version was proposed in February during the regular legislative session — to placate skeptics of the proposal’s economic viability and potential to help those outside of the film industry. 

The final version of the bill increased investment requirements from film production companies, requiring them to invest $900 million in construction by the end of 2030 and $1.8 billion in capital investment by the end of 2039, or else the yet-to-be-created film studio project in Summerlin would be subject to a lien.

It also would have created a special tax district in Summerlin where an estimated $11 million annually would have gone to pre-K programs in the Clark County School District, funding about 1,290 seats out of 27,000 children eligible for pre-K. 

And an amendment to the bill last week would have directed some room tax revenues from the Summerlin district to provide funding for retired state workers’ health benefits.

Opposition

However, these initiatives were not enough. There was a significant opposition campaign from progressive groups and the American Federation of State, County and Municipal Employees Local 4041, the largest union for state workers.

In recent days, opponents highlighted estimates from legislative fiscal staff that the state budget will be in the red for at least the first two years of the program. The projections expected the final balance of the state budget in fiscal years 2030 and 2031 would be about $100 million and $260 million, respectively, below the required balance — deficits that would not occur if the tax credits do not go through.

To make up for these deficits, the state would have had to either raise revenue or cut services.

A state-commissioned analysis on a previous version of the bill found that it could generate significant economic activity, but the amount of tax revenue government entities would recoup would fall far short of breaking even with how much governments invested. The study was conducted before the stricter investment requirements and was slightly more pessimistic than the backers’ own economic analysis.

Although proponents acknowledged the tax credits themselves would generate a negative return on investment, they argued the program would have created more jobs and result in more money in residents’ pockets. 

Their own estimates shared in a Sunday hearing (but not published online) projected the creation of 21,000 construction jobs during the project build-up phase and an additional 17,000 jobs once the project is complete. Construction trade unions have been key supporters of the bill.

The bill also included new language to allow the state to suspend redemptions of tax credits in the case of economic downturns — defined as if revenues in a given year are at least 10 percent less than anticipated — as a way to maintain more favorable cash flow. Legislative staff noted at a bill hearing on Sunday that a drop in revenues that dramatic has only happened once.

Skeptics of the bill have raised concerns about the redeeming of tax credits in poor economic climates. Additionally, because the credits are transferable and the taxes that can be credited rarely apply to film companies, the studios themselves rarely use them. Instead, the studios transfer them at a discounted rate to companies that can use the credits — typically gaming and insurance groups — in exchange for cash.

Opponents also criticized an amendment to the bill that watered down certain workforce diversity rules.

The amendment removed language to cut the amount of tax credits if a production company did not do enough to either train or provide opportunities for underrepresented groups, or ensure diversity throughout the film production hierarchy, including among directors and editors.

Instead, the final version set a goal for production companies to ensure at least 30 percent of workers on a film are part of a traditionally underrepresented group. If companies don’t provide proof that they’ve met the goal, the tax credits would not be issued, but the sanctions could be reduced if there was a “good faith effort” to meet diversity standards.
The NAACP Las Vegas branch filed a records request seeking correspondence involving the governor’s office about the change.

Updated on 11/19//25 at 10:39 p.m. to include a statement from Lombardo and at 11:01 p.m. to add comments from Jauregui and Taylor.