Motion Picture Investor Tax Credit
Louisiana's Motion Picture Investor Tax Credit provides motion picture productions a 30% transferable tax credit on total in-state expenditures, including resident and non-resident labor, with no cap and a minimum spending requirement of $300,000. For productions using in-state labor, Louisiana offers an additional 5% payroll tax credit.
- Provides up to 35% transferable tax credit
- $300,000 minimum in-state expenditure requirement
- No cap
- Tax credits may be used to offset personal or corporate income tax liability in Louisiana
- Tax credits may be transferred to Louisiana taxpayers
- Tax credits may be transferred back to the State for 85% of face value
The program is open to all motion picture production companies headquartered and domiciled in Louisiana for the purpose of producing nationally or internationally distributed motion pictures with total Louisiana expenditures exceeding $300,000.
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
Non-qualifying productions include:
- Televised news
- Sporting events
Eligible Production Expenditures
- Salaries for services performed in Louisiana directly related to the state-certified production
- 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
- Catering/craft services
- Props rental
- Lumber and other building materials directly related to the state-certified production
- Lighting and grip
- 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
Non-eligible Production Expenditures
- 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
All incentive program rules are in the Louisiana Administrative Code maintained by the Office of the State Register.
- View the Titles of the Louisiana Administrative Code
- Choose Title 61, Revenue and Taxation
- Rules for the Motion Picture Investor Tax Credit program can be found in Part I, Chapter 16, Subchapter A
Apply online using FastLane.
Initial Certification (60-90 business days)
1. Applicant completes and submits the online application with supporting documents in their entirety to Louisiana Entertainment. 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.)
- 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
2. Once the application is complete, the project is evaluated for eligibility, and if LED and Louisiana Entertainment determine that the project meets eligibility requirements in accordance with State law and the program rules and regulations, then LED and Louisiana Entertainment shall issue an Initial Certification letter indicating that the project is now considered a "state-certified production." The Initial Certification letter states that the project is eligible to receive potential tax credits and does NOT certify any expenditures for tax credits. Additional detailed guidelines are provided within the initial certification letter.
3. The applicant signs the Initial Certification letter and returns it to Louisiana Entertainment.
Final Certification (60-90 business days)
1. Once the minimum $300,000 expenditure threshold is met and prior to the issuance of credits, the state-certified production must submit an audit to Louisiana Entertainment. The audit must be performed by an independent CPA licensed in Louisiana. The audit must conform to GAAP/GAAS as well as the audit guidelines found in the initial certification letter.
2. In addition to the audit report, the following should be submitted:
- 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).
3. Louisiana Entertainment may require additional support and/or verification for certain expenditures.
4. After all supporting documentation is received and reviewed, Louisiana Entertainment and LED will issue a "Final Certification" letter approving the qualifying expenditures and certifying the tax credits.
5. The credits are now transferable.
Claiming/Transferring the Credits (30-45 business days for option #3 below)
Upon receiving a Final Certification letter, the individual and/or entity to which the credits were issued has three options:
1. Tax credits may be used to offset personal or corporate income tax liability in Louisiana.
2. Tax credits may be transferred to Louisiana taxpayers.
3. Tax credits may be transferred back to the State for 85% of face value.
Q. Brad Pitt and Angelina Jolie are hired to film a major motion picture about life as a famous couple in New Orleans. The tentative title of the project is "Brangelina." Will their actor fees qualify?
A. Services will qualify if performed in Louisiana.
Q. The film "Brangelina" needs enough wood and nails to build a replica of their French Quarter house on a soundstage facility in Louisiana. Does the wood and other items purchased from the Louisiana hardware store for the production qualify? Does the rental of the facility qualify?
A. Goods will qualify if purchased through a source in Louisiana. A source is a physical nexus with at least one full-time employee. The rental of the facility qualifies if the facility if physically located in Louisiana.
Q. "Brangelina" decides that they need to film at a beachfront casino in Biloxi, Mississippi. What doesn't qualify for Louisiana incentives?
A. Money that is spent outside of Louisiana or expenditures that are indirect or not production-related do not qualify for the tax credit. For example, money spent renting a Ferrari in Louisiana as a prop for the portion of the production in Louisiana may be eligible; however, if that Ferrari is used on the production in Biloxi, those costs will not qualify and the production must exclude that portion of the rental from the qualifying expenditures.
Q. Spending in Louisiana started before receiving Initial Certification. Can expenses still be claimed?
A. Yes. Eligible expenditures are creditable for at least one year prior to and one year after Initial Certification.
Q. What is the minimum threshold to qualify?
A. $300,000 in Louisiana expenditures.
Q. What qualifies for the 30% credit?
A. Only expenditures made for tangible goods and services directly related to the state-certified production within the borders of the State of Louisiana. That includes production payroll for residents and non-residents alike, as long as it is for work performed in Louisiana.
Q. What qualifies for the additional 5% credit?
A. To the extent that base investment is expended on payroll for Louisiana residents employed in connection with a state-certified production, each investor shall be allowed an additional tax credit of 5% for Louisiana resident payroll. The additional 5% credit is only allowed on the first $1 million of a resident's payroll. Any amount above that shall be eligible for the 30% credit only.
Q. How do I know if something is a Louisiana spend?
A. Services will qualify if performed in Louisiana. Goods will qualify if purchased through a source in Louisiana.
Q. What is a source within the state?
A. A source is a physical nexus with at least one full-time employee and posted business hours.
Q. Are goods obtained through a production service company or a reseller eligible?
A. Yes. However, the production must make an effort to find the tangible good in Louisiana. The efforts must be documented, and anything obtained through this method may be disallowed if the good is readily available in Louisiana.
Q. I'm a Louisiana taxpayer and I earned these tax credits. Can I use the tax credit to offset my personal income tax liabilities?
Q. I'm a Louisiana corporation and subject to corporate income taxes. Can I use the tax credit to offset my corporate income tax liabilities?
Q. I've earned this tax credit and have no Louisiana income tax liabilities. Can I transfer the credit?
A. Yes. The credits are fully transferable.
Q. I've earned this tax credit and I cannot find anyone to transfer this credit to in Louisiana. What do I do?
A. You can opt to transfer the credit to Louisiana Entertainment. The state will then issue you a check for 85% of the face value of the credits. In other words, for $1 worth of credits, the State will issue you a check for $0.85.
Q. Must a certain percentage of crew be Louisiana residents?
A. No. However, Louisiana has a skilled and deep crew base and expenditures made on hiring Louisiana residents increases the potential tax credits that can be earned.
Q. Are fuel purchases eligible for tax credits?
A. Yes. However, any taxes charged by the State or any local governing entity in Louisiana are ineligible and must be removed from qualifying expenditures. These amounts are subject to verification by the CPA.
Q. Do fringes qualify?
Q. Do you accept loan outs?
Q. Are bond fees eligible?
A. Yes, as long as the bond is purchased from a Louisiana company and all of the services relating to the issuance of the bond are performed in Louisiana.
Q. Are per diems eligible?
Q. Are finance fees eligible?
A. Yes, as long as the finance fees are not associated with a related-party transaction. In addition, the financing must be obtained from a source within the state and any services provided must be performed in the state.
Q. How is a Louisiana resident defined?
A. Any person domiciled in the state of Louisiana and any other person who maintains a permanent place of abode within the state and spends in the aggregate more than six months of each year within the state is considered a Louisiana resident. The resident must sign a declaration of residency and provide supporting documentation for the production.
Q. How long do I have to start production once I receive Initial Certification?
A. 365 days.
Q. My spending in Louisiana started before receiving Initial Certification. Can some of these expenditures still be claimed?
A. Yes. Expenditures may be eligible for one year prior to and one year after initial certification.
Q. What is the going rate for tax credits on the open market?
A. Tax credits usually sell between 80 and 90 cents on the dollar on the open market. Also, you can transfer the credits to the State for 85 cents on the dollar.
Q. What if I have not secured distribution yet?
A. We only require that there be a commercial multi-market distribution plan, not a distribution agreement in place.
Q. What if I take a Louisiana crew to another state?
A. That is certainly permissible; however, credits can only be issued for the work performed directly in Louisiana.
- Complete the application form online.
- If approved, LED issues Initial Certification.
- Track production project's expenses.
- Submit audited cost report performed by Louisiana-licensed CPA to LED.
- If approved, LED issues Final Certification for the amount of the tax credit.
- Claim credits on Louisiana tax return, transer on the open market or elect transfer back to State for 85 percent of face value.
Christopher StellyExecutive Director, Louisiana Entertainment
For more information, visit louisianaentertainment.gov
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