Louisiana’s film industry has been growing these last several years, largely due to the film tax incentives the state has mapped out. Productions can earn up to a 40% tax credit. Numbers like that make jumping through a few extra hoops absolutely worth it. The further your dollar stretches, the better film you can produce.
If you haven’t filmed in Louisiana since before July 1, 2017, you’ll want to brush up on a few changes the state has made to its film tax credit program. Since July 1, 2017, Louisiana’s Motion Picture Production Tax Credit provides film productions up to a 40% tax credit on total qualified in-state production expenditures, including resident and non-resident labor.
Quick Overview of Louisiana’s Motion Picture Production Tax Credit
Provides up to a 40% tax credit (25% base credit; 10% increase for Louisiana screenplay productions, 5% increase if outside of the New Orleans Metro Statistical Area). $50,000 minimum in-state expenditure requirement for Louisiana screenplay productions. $300,000 minimum in-state expenditure requirement on all other eligible productions. The maximum amount of credits that can be issued is $150 million per fiscal year. The maximum amount of credits that can be claimed is $180 million per fiscal year. Tax credits may be used to offset personal or corporate income tax liability in Louisiana. Tax credits may be transferred back to the State for 90% of face value (requires a 2% transfer fee which results in an 88% net).
Who is eligible?
The program is open to all motion picture production companies headquartered and based in Louisiana producing nationally or internationally distributed motion pictures with total Louisiana expenditures exceeding $300,000, or $50,000 for Louisiana screenplay productions. Only expenditures made for tangible goods and services directly related to the state-certified production within the borders of the State of Louisiana qualify. That includes production payroll for residents and non-residents alike, as long as it is for work performed in Louisiana.
Base Investment Credit Rates (applicable to entire eligible spend):
25% base credit 10% increase for Louisiana screenplay productions (if production is based on a screenplay created by a Louisiana resident, with expenditures greater than $50,000, but no greater than $5 million) 5% increase for out of NOLA zone filming (if production’s office base and at least 60% of principal photography occurs outside of the New Orleans Metropolitan Statistical Area) Base investment credit rate increases may be combined as follows; 30% total - 25% base plus 5% out of zone filming; or 35% total - 25% base plus 10% LA screenplay increase; or 40% total - 25% base plus 5% out of zone filming, and 10% LA screenplay A legal resident who is required to file a Louisiana resident individual income tax return is considered a Louisiana resident. The resident must sign a declaration of residency and provide supporting documentation for the production.
Additional Credits (applicable to the particular spend only):
15% Louisiana resident payroll credit: Compensation for services paid directly to a Louisiana resident shall be eligible for a 15% payroll tax credit on the qualified Louisiana payroll only. Payments made to a loan-out company are not eligible for this credit. 5% visual effects (VFX) credit: If at least 50% of the production’s VFX budget is expended for services performed in Louisiana by an approved Qualified Entertainment Company (QEC) or a minimum of $1 million on qualified VFX expenditures are made in Louisiana, the production shall be eligible for an additional 5% credit on the qualified VFX spend only. **Total Credits cannot exceed 40% of the base investment
Qualifying productions include:
Feature-length motion pictures Television pilots, series, or movies of the week Animated feature films Animated short films Webisodes or any other digitally distributed motion picture Documentaries Commercials
Non-qualifying productions include:
Televised news Sporting events Music Festivals
Eligible Production Expenditures
Up to $3 million in qualifying payroll expenditures per person, whether paid directly or indirectly- through a loan out corporation Producer fees for services performed in Louisiana Rentals/purchases of tangible goods from a source within the state and directly used on a state-certified production in Louisiana Camera rentals Soundstage rental Hotel Props rental Lumber and other building materials directly related to the state-certified production Lighting and grip Makeup Wardrobe Leasing of vehicles Visual FX packages for services performed in Louisiana Editing services performed in Louisiana Film processing performed in Louisiana by a Louisiana processing company Sound mixing Other post-production services performed in Louisiana Marketing and promotion expenses on certain Louisiana expenditures The initial certification covers expenditures made 12 months prior to the date of application and 24 months after the date of initial certification. Services will qualify if performed in Louisiana. Goods will qualify if purchased through a source in Louisiana. A source is a physical nexus with at least one full-time employee and posted business hours.
Non-eligible Production Expenditures
Qualifying payroll expenditures in excess of $3 million per person, whether paid directly or indirectly through a loan out corporation. Payments made to loan-out companies are subject to the $3 million salary limitation. Salaries for services performed outside of Louisiana Rentals/purchases of tangible goods from a source outside of Louisiana Rentals/purchases of tangible goods from a source within Louisiana but used outside of the state Related-party finance fees Application fee Expenditures for marketing and distribution Non-production related overhead Costs related to the transfer of tax credits State/local taxes Above the line salaries exceeding 40% Above the line salaries - related party transactions exceeding 12% Verification report fee Airfare Bonds, fees, insurance premiums, finance fees, loan interest fees (except those paid to certain Louisiana companies) Catering (unless obtained from a source within the state)
Program Statutes & Rules:
All incentive program rules are in the Louisiana Administrative Code maintained by the Office of the State Register. Motion Picture Investor Tax Credit Statutes Motion Picture Investor Tax Credit Rules Choose Title 61, Revenue and Taxation Go to Part I, Chapter 61 Miscellaneous Provisions
What is the process?
Complete the application form and fees online. If approved, LED issues Initial Certification. Track production project expenses. An expenditure verification report is performed by an independent CPA selected by the Office of Entertainment Industry Development. If approved, LED issues Final Certification for the amount of the tax credit. Claim credits on Louisiana tax return or elect transfer back to State for 90 percent of face value (requires a 2% transfer fee which results in an 88% net). Louisiana only requires that there be a commercial multi-market distribution plan, not a distribution agreement in place.
How I do apply for the Louisiana Motion Picture Production Tax Credit?
Follow this link to FastLane to apply and submit the application fee and verification report fee.
What are the next steps?
Initial Certification (60 days from receipt of a complete application) Applicant completes and submits the online application with supporting documents and fees to OEID. Supporting documents include the following: Detailed preliminary budget (including above-the-line and below-the-line hires) Detailed preliminary Louisiana budget Detailed distribution plan Script or Synopsis (including principal creative elements: cast, producer, director, etc.) A statement that the project meets the definition of a state-certified production A notarized statement agreeing to pay all vendors Disclosure of any anticipated related-party transactions Prior to OEID’s review of the application, an expenditure verification report (aka “audit”) deposit shall be submitted according to the following schedule: Once the application is complete (including receipt of the audit deposit), the project is evaluated for eligibility, and if OEID determines that the project meets eligibility requirements in accordance with State law and the program rules and regulations, then an Initial Certification letter will be issued. The Initial Certification letter does NOT certify any expenditures for tax credits. Additional detailed guidelines are provided within the initial certification letter. Either an initial certification or denial will be issued by the department within 60-90 business days of receipt of a complete application. The applicant signs the Initial Certification letter and returns it to OEID. Final Certification (120 Days from receipt of complete audit and requested support) Upon completion of the production, the applicant shall notify OEID that they are ready to proceed to final certification and submit a cost report. The assigned CPA will start their audit and provide a report to OEID. In addition to the audit report, the following should be submitted to the CPA (and upon request to OEID): Full bible run(s) — any and all data detailing expenditures (in-state and out-of-state) related to the production. Full payroll data — any and all data related to payroll associated with the production (CPA should validate Louisiana payroll by a review of the declarations of residency required to be maintained with support by the production). The CPA may require additional support and/or verification for certain expenditures. After all supporting documentation is received and reviewed, OEID and LED will issue a "Final Certification" letter approving the qualifying expenditures and certifying the tax credits (or a written denial in whole or in part) within 120 days of receipt of a complete package. The credits can now be applied to the applicant’s (or their irrevocable designee’s) Louisiana income taxes or transferred to the state for 90% of the face value (net of 88% due to a 2% fee that LDR will collect)
Who do I contact with questions or comments about Louisiana’s Film Tax Incentive?
STEPHEN HAMNER Director, Film Phone: 225.342.4838
AMANDA HAFFORD Business Development Manager Phone: 225.342.5633
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