Robert Downey Jr.'s Sherlock Holmes 3 to Receive Near-Record $20.8 Million in California Tax Credits

After spending nearly a decade on the shelf listening to fans beg for another sequel, Robert Downey Jr. and Jude Law's Sherlock Holmes franchise is finally moving forward with a third film. Not only that, but it looks as though the new movie will get a massive boost by filming in California ahead of its 2021 premiere date.

On Monday morning it was announced that Sherlock Holmes 3 was one of 10 films to get new tax credits from the California Film Commission, and it will receive by far the biggest sum of the group. The upcoming sequel has been granted a conditional $20.8 million tax credit for shooting in California.

The reason for this massive cut comes from the incredible amount of spending expected from Warner Bros. on the project. Sherlock Holmes 3 will generate an expected $106.8 million in qualified expenditures, according to Variety. That's the second-highest project spending total in the Film Commission's Project 2.0, behind only Captain Marvel's $118 million.

“California is once again competing for big-budget film projects because it’s becoming clear that chasing the highest tax credit doesn’t always provide the best value,” said California Film Commission Executive Director Colleen Bell. “In addition to our tax credit program, we have so many resources that other locales simply can’t match.”

Other projects in the new wave of tax cuts include Warner Bros. King Richard, starring Will Smith, as well as the studios' remake of Little Shop of Horrors. Universal's Purge 5 was also given conditional cuts, along with smaller projects like Janis, American Pie Presents: Girls Rule, Cherry, Macbeth, Pandora, and Untitled Atomic Monster Film.

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Guy Ritchie directed the first two Sherlock Holmes films, hitting theaters in 2009 and 2011, each grossing over $500 million at the box office. However, Ritchie won't be taking the helm of the third installment. Rocketman director Dexter Fletcher has taken over to bring the new movie to life and Chris Brancato is writing the script. Downey Jr. and Law will be returning as Sherlock Holmes and John Watson.

Sherlock Holmes 3 is set to hit theaters on December 21, 2021.