State-by-state production incentives
Louisiana
| Louisiana | |
| Incentive Type | Transferable tax credit, or the state will redeem at 85 cents. |
| Incentives Highlights | 30% transferable tax credit on qualified expenses, plus an additional 5% tax credit on resident hires up to the first $1M in wages. |
| Eligible Projects | Films, television, pilots, series, reality shows and MOWs |
| Minimum Spend | $300,000 |
| Production Cap or Annual Cap | No project or annual caps. Resident wages are capped at $1M for the added 5%.
Related party transactions (“RPT”) for producer fees are capped at the higher of $3M or 12% of budget – please check state rules for RPT. |
| Application/Reporting Requirements | Productions must be pre-qualified with the state, and pay an application fee of $200 – $5,000. A Louisiana CPA audit of spend is required for certification. Multiple tax credit certifications are allowed. |
| Loan-Out Reg Required? | No |
| CPA Audit? | Yes |
Office of Entertainment Industry Development
Christopher Stelly, Film & Television
Director
Chris.Stelly@la.gov
t: (225) 342-5403
f: (225) 342-5349
www.LouisianaEntertainment.gov
Jefferson Parish Film Office
Jennifer Van Vranken, Film Liason
jvan@jeffparish.net
t: (504) 736-6412
f: (504) 736-6638
OVERVIEW
Louisiana offers a 30% transferable income tax credit for expenditures incurred within the state, e.g., purchases made from a Louisiana vendor. ATL, resident and non-resident labor qualify for this incentive, which has no salary caps. An additional 5% credit is offered on the first million dollars of each Louisiana resident’s payroll. This brings the total credit earned on Louisiana resident labor to 35% (subject to the $1M per hire cap on the 5%). Also, the state now provides for an 85 cent buy-back of all certified tax credits for projects which receive their initial certification on or after July 1, 2009. The minimum in-state spend is $300,000 and there is no per production or statewide cap. All fringes qualify, as do payroll-processing fees paid to a local vendor, however, only the portion of the fees for services performed in Louisiana will qualify. Inclusion of a state brand or logo is required for certified productions.
DETAILS
Pre-production, production, and post-production expenses qualify for the credit. Qualified payroll is defined as salary, wages, and other compensation, including related benefits.
A resident is defined as any person domiciled in the state or any other person who maintains a permanent place to live and spends more than six months of each year within the state.
The initial certification process begins when the production company submits an application to the Office of Entertainment Industry Development along with a detailed distribution plan, a detailed preliminary budget, a script or synopsis, a statement that the project meets the definition of a state-certified production, and other required information. The minimum application fee is $200 and the maximum fee is $5,000. The fee is calculated as .2% of the estimated total incentive credits. After review, the state issues an initial certification letter to the production.
During production (once the minimum in-state spend threshold of $300,000 is met) the producer may request that expenditures to date be certified; once certified by the film office, they may be sold to brokers or private buyers. It is not necessary to complete the film prior to selling certified credits if earned in accordance with Louisiana state law. However, the statute prohibits the transfer of credits before they are certified. Expenditures may be certified twice during the duration of the production, at no charge. Thereafter, there is a fee of $250 per additional certification. An independent CPA, licensed in Louisiana, must audit and certify a production’s expenditures before the State will certify credits; each time a production requests certification of expenditures an audit report must be sent to the Office of Entertainment Industry Development.
The credit may be used against the Louisiana tax liability of an individual or corporation, sold, or the investor may transfer credits to the Office of Entertainment Industry Development for 85 cents on the dollar. Some of the tax credit brokers and various banks will advance funds against the credits. If the credit exceeds the tax liability, it may be carried forward for ten years. Within 30 days of a sale or transfer, both parties must notify the Department of Revenue (DOR) and the Office of Entertainment Industry Development, in writing. If for any reason, the DOR disallows the credit claimed by the transferee, the transferee’s recourse is against the transferor.
The state administers other incentive programs offering additional credits in other areas of entertainment, such as interactive media development, sound recording and live performance.
There are three major Louisiana production centers – New Orleans, Baton Rouge and Shreveport – with additional production in Lafayette, Alexandria, and other parts of the state. Louisiana offers a substantial crew base; camera, grip, and electrical equipment are also available in the state.
Additionally, the City of Shreveport offers a tax rebate equaling the City of Shreveport sales taxes, with a basic cap of $150,000 per project, and a subsequent production cap of $165,000. There is a $10,000 cap increase for productions which use a Caddo Parish based post-production facility.
Only work actually done in the state qualifies; outsourcing of any type of service performed outside of the state of Louisiana is not a qualified expenditure. Louisiana requires production companies to agree to pay all undisputed obligations, to publish a notice that creditors should file requests for payment by a specific date, and to agree that failing to file by that date does not waive the obligation. A claim for the film production credit may not be filed until the film office delivers written notification to the Secretary of the Department of Revenue that the film production company has fulfilled all requirements for the credit. Further, the state recently enacted related party transaction rules. These expenditures may require a second audit payable by the production company.