Motion Picture Production Program

Motion Picture Production Program Tax Credit

$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).

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25% base credit

on qualified in-state production expenditures

10% increase

for Louisiana screenplay productions

5% increase

if outside of the New Orleans Metro Statistical Area

25% base credit

on qualified in-state production expenditures

10% increase

for Louisiana screenplay productions

5% increase

if outside of the New Orleans Metro Statistical Area

Eligibility Requirements

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)

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

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

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

Non-qualifying productions include:

Televised news
Sporting events
Music Festivals

Non-eligible Production Expenditures

Qualifying payroll expenditures in excess of $3 million per person, whether paid directly or indirectly through a loan out 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)

The Process

1

Complete application form online. In order for the application to be considered received, ALL information and fees (application and expenditure verification report deposit) must be submitted.

2

If approved, LED issues Initial Certification.

3

Track production project’s expenses.

4

Submit a cost report to the office online.

5

An expenditure verification report is performed by an independent CPA selected by Office of Entertainment Industry Development.

6

If approved, LED issues Final Certification for the amount of the tax credit.

7

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).

1

Complete application form online. In order for the application to be considered received, ALL information and fees (application and expenditure verification report deposit) must be submitted.

2

If approved, LED issues Initial Certification.

3

Track production project’s expenses.

4

Submit a cost report to the office online.

5

An expenditure verification report is performed by an independent CPA selected by Office of Entertainment Industry Development.

6

If approved, LED issues Final Certification for the amount of the tax credit.

7

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).

Next Steps

Initial Certification

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
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:

$50,000 – $300,000 $5,000

$300,000 – $25,000,000 $7,500

$25,000,000 and above $15,000

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.

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

Final Certification

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.

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).

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