Motion Picture Tax Credit
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Motion Picture Production Tax Credit

For a complete overview of changes made in 2017, click here.

For applications received on or after July 1, 2017, Louisiana's Motion Picture Production Tax Credit program provides motion picture productions up to a 40% tax credit on total qualified in-state production expenditures, including resident and non-resident labor.
  • 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).

Eligibility

The program is open to all motion picture production companies headquartered and domiciled in Louisiana producing nationally or internationally distributed motion pictures with total Louisiana expenditures exceeding $300,000, or $50,000 for Louisiana screenplay productions.  

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

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 our 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

Non-eligible Production Expenditures

  • Qualifying payroll expenditures in excess of $3 million per person, whether paid directly or indirectly through a loan our corporation
  • 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.


Getting Started

Apply online using FastLane and submit application fee and verification report fee.


Next Steps

Initial Certification (60 days from receipt of a complete application)

  1. 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.)
    • Statement that the project meets the definition of a state-certified production
    • notarized statement agreeing to pay all vendors
    • Disclosure of any anticipated related-party transactions
  2. Prior to OEID’s review of the application, an expenditure verification report (aka “audit”) deposit shall be submitted according to the following schedule:
  3. Production Size                  Deposit Amount 
    $50,000 - $299,999              $5,000 
    $300,000 - $24,999,999       $7,500 
    $25,000,000 – Above           $15,000

  4. 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.
  5. The applicant signs the Initial Certification letter and returns it to OEID.

Final Certification (120 Days from receipt of complete audit and requested support)

  1. 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.
  2. 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).
  3. The CPA may require additional support and/or verification for certain expenditures.
  4. 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.
  5. 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).

Eligibility Scenarios

Q. The film "Brangelina" needs enough wood and nails to build a replica of their French Quarter house on a soundstage facility in Louisiana. Do 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 12 months prior to the date of application and 24 months after Initial Certification.


FAQS

Q. What is the minimum threshold to qualify?
A. $300,000 in Louisiana expenditures, $50,000 for Louisiana screenplay productions.

Q. What qualifies for 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 15% payroll tax 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 15% for Louisiana resident payroll. The additional 15% credit is only allowed on the first $3 million of a resident's payroll. Any amount above that shall be eligible for the 30% credit only. It must be expended on a natural person (not a loan-out) in order to qualify for the additional 15%.

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. I've earned this tax credit and have no Louisiana income tax liabilities. Can I transfer the credit?
A. For credits that have been earned on productions that applied to OEID before July 1, 2017, the credit is fully transferable. For credits earned on productions that applied to OEID on or after July 1, 2017, the credit is NOT transferable.

Q. I've earned this tax credit and have no Louisiana income tax liability. What do I do?
A. For productions that have earned tax credits on applications submitted before July 1, 2017, you can opt to transfer the credit to the Louisiana Department of Revenue, who 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. For productions that have earned tax credits on applications submitted on or after July 1, 2017, you can opt to transfer the credit to the Louisiana Department of Revenue, who will then issue you a check for 90% of the face value of the credits. In other words, for $1 worth of credits, the State will issue you a check for $0.90. (*the ultimate net will be 88% because LDR will collect a 2% transfer fee)

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?
A. Yes.

Q. Are payments made to loan-out companies subject to the $3 million salary limitation?
A. Yes.

Q. Are per diems eligible?
A. Yes.

Q. Are finance fees eligible?
A. No, unless paid to certain Louisiana companies, in which case fees may be allocated on a pro rate basis based on production activity occurring in and out of state. 

Q. How is a Louisiana resident defined?
A. 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.

Q. My spending in Louisiana started before receiving Initial Certification. Can some of these expenditures still be claimed?
A. The initial certification covers expenditures made 12 months prior to the date of application and 24 months after the date of initial certification.

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.