ConceptUS

Tilly Tax

A proposed royalty on AI-generated performers, negotiated by SAG-AFTRA, designed to price synthetic actors at or above parity with human performers.

Last refreshed: 29 March 2026

Key Question

Can a royalty on AI actors save 160,000 performers' jobs, or will studios simply move production offshore?

Latest on Tilly Tax

#222 Mar

Hollywood unions push royalty to beat AI

Common Questions

What is the Tilly Tax?: A proposed royalty on AI-generated performers being negotiated by SAG-AFTRA in its 2026 AMPTP contract talks. It would make synthetic actors cost the same or more than real ones, with revenue funding union healthcare and pension.Source: SAG-AFTRA
Why is it called the Tilly Tax?: Named after the pioneering visual effects in the 1988 film Who Framed Roger Rabbit, which blended live action with animation. The name references the earliest commercial attempt to create synthetic performers alongside real actors.
What is the difference between the Tilly Tax and the robot tax?: The Tilly Tax is a sector-specific royalty pricing AI performers at parity with humans in entertainment. The robot tax is a proposed federal per-position levy across all industries. Both aim to remove AI's cost advantage but operate at different scales.Source:
Would the Tilly Tax apply outside Hollywood?: Not directly. It is a contractual mechanism within SAG-AFTRA's AMPTP negotiations, limited to unionised film, television, and streaming. However, tech companies fear it could set a precedent for royalty frameworks in advertising, gaming, and corporate media.Source:

Background

Named after the pioneering visual effects in the 1988 film Who Framed Roger Rabbit (which blended live action with animation using the character of Jessica Rabbit's human co-star), the Tilly Tax embeds a cost penalty at the point of substitution rather than banning AI use or taxing it after displacement occurs. It is structurally distinct from the federal robot tax proposed by Bernie Sanders, which levies a per-position charge across all industries.

SAG-AFTRA is negotiating the Tilly Tax in its 2026 AMPTP contract talks: a royalty on AI-generated performers designed to make synthetic actors cost the same or more than real ones . Revenue would bolster the union's healthcare and pension funds, already strained by streaming-era residual declines. The proposal is the first attempt anywhere to price synthetic labour at contractual parity with human labour.

If the royalty survives the 2026 contract negotiations, it becomes a template for every sector where AI can replicate individual workers' output. Tech companies are already lobbying against any royalty framework migrating from entertainment into advertising, gaming, and corporate media, where union jurisdiction is absent but political precedent would not be.

Source Material

SAG-AFTRA's AI Contract Provisions Variety — SAG-AFTRA AI provisions

How the World Sees Them

SAG-AFTRA

The union views the Tilly Tax as its structural defence against AI-driven obsolescence, building on the consent provisions won in the 2023 strike. Success would secure the healthcare and pension funds that streaming residual declines have eroded.

AMPTP (studios)

Studios view AI performers as a core cost-reduction tool in the post-streaming-bubble era and are expected to contest both the royalty rate and the fund distribution mechanism. Accepting parity pricing would eliminate the economic case for synthetic actors.

AI technology companies

Avatar and voice-synthesis firms see the Tilly Tax as a regulatory precedent that could spread from entertainment into any industry using AI-generated human likenesses. Several have begun pre-emptive lobbying against royalty frameworks entering broader AI legislation.

International performers' unions

FIA affiliate unions in Europe and Australia lack the strike leverage to impose a similar mechanism on US-based streaming platforms that dominate their markets. A SAG-AFTRA precedent would likely become the global default through platform adoption.