Louisiana Entertainment Industry Tax Incentives
Louisiana’s entertainment industry is thriving!
In 2008, the state shattered all its previous records for film and television production, and it shows no signs of slowing down. The state has seen an increased interest in its digital media industry, and initiatives are being undertaken to further bolster Louisiana’s music scene and live performance arena.
The state offers aggressive tax credit programs for entertainment industry ventures in digital media, motion picture, sound recording and live performance. These programs offer companies an unparalleled opportunity to succeed financially and creatively.
Office of Entertainment Industry Development
1051 N. Third St.
Baton Rouge, LA 70802
Film & Television “30/05 Tax Incentive”
The Motion Picture Production Tax Credit (30/05 incentive program) is a fully transferable credit of 30% for qualified motion picture expenditures, of at least $300,000, with no project or program caps and an additional 5% on labor payroll expenditures for Louisiana residents — a 35% effective total credit rate.
Since 2002, Louisiana has appeared in the credits of more and more motion pictures, thanks to the state’s unique tax incentive package directed at attracting film and television work. Currently, Louisiana ranks third in film and television production nationwide, behind only California and New York.
Louisiana’s skilled crew base has grown by over 400 percent since the start of the tax incentive program, and infrastructure continues to develop to answer the demand from film and television producers. Louisiana is now home to six studios and sound stages, with facilities in New Orleans, Baton Rouge and Shreveport, and more on the way.
In 2008, Louisiana set a production record with more than 80 major film and television projects, representing more than $800 million in production budgets, including about $500 million spent in-state. The state’s previous mark was 56 projects, set in 2007.
For evidence that Louisiana has become a serious player in the film industry, look no further than 2009′s Oscar contender “The Curious Case of Benjamin Button,” starring Brad Pitt and Cate Blanchett, which earned the highest number of nominations, including Best Picture, Best Director, Best Actor and Best Supporting Actor at the 2009 Academy Awards.
In addition, two Louisiana-made feature films, “I Love You Phillip Morris” and “Killing Room,” premiered at the 2009 Sundance Film Festival, which was celebrating the 20th anniversary of the landmark independent film, “sex, lies & videotape.” Also, “Drool” premiered at the Slamdance Film Festival, winning Best Original Screenplay.
The tax credits, talented workforce and well-developed infrastructure help create great filmmaking experiences. But directors and producers keep coming back to Louisiana for the less-tangible assets, such as the variety of locations, unique joie de vivre and the overwhelming support of Louisiana’s citizens.
A production company has several ways to use a tax credit:
1. Tax credits can be applied against any Louisiana tax liability.
2. Production companies can also claim a direct refund for 85% of the face value of the tax credit from the Louisiana Department of Revenue.
3. Tax credits can be transferred or sold by a production company to a third party.
Some of the steps needed to apply:
Complete and submit the Motion Picture Production Application.
Application fee (minimum: $200 / maximum: $5,000): Fee is assessed as 0.2% of the total amount of tax credits for which the production qualified.
Detailed preliminary budget.
National multi-market distribution plan.
Statement that the project meets the definition of a “state-certified production.”
Notarized statement agreeing to pay all vendors.
LA LLC & LA Tax ID Number.
Any other information requested by the office needed to make a determination.
Digital Media “25/10 Incentive”
The Digital Interactive Media Tax Credit program provides a tax credit of 25% of qualified production expenditures for state-certified digital interactive productions in Louisiana and an additional 10% tax credit for payroll expenditures for Louisiana residents, with no annual cap — a 35% effective total credit rate.
Louisiana is focusing a great deal of attention and effort on the cultivation of its video game development industry. Since 2005, the state has instituted an aggressive tax incentive program for video game production and encouraged workforce development programs at several universities throughout the state. By implementing digital interactive tax credits, pursuing small video game development studios and developing workforce programs, Louisiana will continue to attract video game developers and other interactive digital media companies.
TurboSquid, a New Orleans-based 3-D graphics company, was the first to take advantage of Louisiana’s digital interactive tax credit. Since then, a number of developers have set up shop in Louisiana. Nerjyzed Entertainment moved from Dallas to Baton Rouge in 2006, distributing its first video game last fall. And Yatec Games has released two causal games and is developing another title to assist children with speech articulation problems.
Most recently, Electronic Arts Inc. opened a major quality assurance center on the campus of Louisiana State University in Baton Rouge. The facility, the first of its kind in the United States, will serve primarily as a test center for EA SPORTS titles, such as Madden NFL, FIFA Soccer, NBA Live, NCAA Football and Tiger Woods PGA Tour. Approximately 20 full-time jobs and 200 part-time jobs will be available for students to evaluate and test EA videogames before they are released to the public.
Louisiana sees the potential in the digital interactive industry. The global video game market alone is worth $30 billion – that’s larger than film and music combined. And online gaming is a $1 billion market projected to quadruple in sales over the next five years.
25% tax credit for digital interactive media expenditures made in Louisiana.
10% additional tax credit on payroll expenditures for Louisiana residents.
No annual cap on tax credits.
The tax credit can be sold or applied against Louisiana tax liability.
Louisiana’s Digital Interactive Media Tax Credit is available to businesses in the digital media industry that develop products including video games, simulation/training software and social media applications.
This tax credit does not apply to software developed for institutional, private or internal purposes, or largely static Internet sites designed to provide information about a person, business, company or firm. The tax credit does not apply to products regulated under the Louisiana Gaming Control Law.
Music/Sound Recording “25 Incentive”
The music and sound recording tax incentive provides a refundable tax credit of 25% on qualified Louisiana expenditures for sound recording and infrastructure development.
Jazz. Cajun. Zydeco. Brass. R&B. Funk. Swamp pop. Perhaps no other Louisiana export enjoys as much worldwide popularity and historical significance as our music. While the Louisiana music industry is as vibrant as ever, Louisiana Economic Development is working to expand the cultural economy and create new opportunities for artists and musicians.
A lot of the effort in this direction has been spearheaded by the Louisiana Music Commission, under the direction of LED’s entertainment division, to establish state recording tax incentives, support Louisiana musicians and promote the state’s music industry.
In addition to the Louisiana Music Commission’s efforts, a number of other organizations are available to assist Louisiana musicians and promote the state’s music industry. Louisiana Music Export Office is a nonprofit sales and marketing bureau established after hurricanes Katrina and Rita that offers consulting and coordinating services to talent scouts, event planners and media outlets. ArtistsHouseMusic.org provides valuable information for musicians of all levels, managers, producers, recording artists, resident business operators and others dealing with all aspects of the industry.
Tipitina’s Music Office Co-ops, located in that famous New Orleans music club, provide a fully equipped work space for musicians, as well as business skills development. Musicians can use computers and receive basic skills training in Web design and press kit creation, along with technical support, production assistance, access to a network of music business professionals, specialized information resources and much more.
Live Performance “25 Incentive”
The live performance tax incentive provides a tax credit of up to 25% of qualified production and infrastructure expenditures for state-certified productions in Louisiana.
As the hallmark of Louisiana’s entertainment scene, the state’s live performance industry is rapidly gaining momentum. Louisiana offers tax incentives, industry expertise and opportunities for collaboration with the state’s top education institutions to the owners, developers and producers of live performance infrastructure and production projects.
Recently, the Mahalia Jackson Theater in New Orleans reopened with great fanfare following $22 million in renovations. The theater, located in the city’s Louis Armstrong Park, had been closed since it received 14 feet of floodwater in the days after Hurricane Katrina. Its reopening means the New Orleans Opera, Louisiana Philharmonic Orchestra and New Orleans Ballet Association can now return home.
The Office of Live Performance Development is working with representatives of the Saenger Theatre, the Orpheum Theater and the Carver Theater in New Orleans, also shuttered since the 2005 hurricanes, as these theaters are vital to the resurgence of live performance in Louisiana. The development of these venues and live performance venues throughout the state will generate significant business activity, household earnings and job creation in Louisiana.
By offering tax incentives to performances that originate in Louisiana, the Office of Live Performance will further its mission of creating an indigenous entertainment industry by providing consistent and sustainable employment opportunities to residents statewide.
:: DISCLAIMER ::
As with all state tax incentive programs, laws and administrative requirements do frequently change. The above information is provided as a reasonable guide only for producers interested in discovering more about Louisiana’s great incentives. You will certainly need experienced professionals to effectively get your production into the respective tax incentive program. [compiled in part from LED]