Tilly Tax

Named after the visual effects breakthrough in the 1988 film Who Framed Roger Rabbit, the Tilly Tax was a proposed royalty on AI-generated performers (synthetic characters not based on real actors) that would have made synthetic actors cost the same or more than real ones. The mechanism was structurally distinct from the federal robot tax proposed by Bernie Sanders: a point-of-substitution cost penalty rather than a post-displacement industry levy. SAG-AFTRA entered its 2026 AMPTP contract talks with the Tilly Tax as its central AI demand, with revenue earmarked for the union's strained healthcare and pension funds.

On approximately 2 May 2026, SAG-AFTRA and the AMPTP reached a tentative four-year agreement approved by the National Board. The union secured consent rights for every use of a performer's digital replica — a meaningful protection for working actors. The Tilly Tax was rejected by the studios. Final contract language restricts synthetic performer use to productions where synthetics bring 'significant additional value', but with no monetary mechanism, no royalty rate, and no fund contribution.

The outcome sets a precedent for every guild negotiating AI terms: consent protections are achievable; per-use royalties are not — at least not in a single contract cycle. The studios argued parity pricing eliminated the economic case for synthetic actors. The precedent now shapes what DGA and IATSE can realistically demand in their own AI bargaining. Tech companies lobbying against royalty frameworks migrating into advertising, gaming, and corporate media are the immediate beneficiaries.