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Regular Session, 2011
HOUSE BILL NO. 248
BY REPRESENTATIVE HENRY
TAX CREDITS: Changes the Digital Interactive Media Producer Tax Credit to a refundable
tax credit and provides other modifications to the program
AN ACT1
To amend and reenact R.S. 47:6022(A), (C)(4)(c)(i), (5), (10)(b), and (14), (D)(2), and (E)2
through (J), and to repeal R.S. 47:6022(K), relative to tax credits; to provide for the3
name and applicability of the digital interactive media producer tax credit; to provide4
for a refundable tax credit; to provide for rebates of tax credits under certain5
circumstances; to provide for definitions, limitations, and program administration;6
and to provide for related matters.7
Be it enacted by the Legislature of Louisiana:8
Section 1. R.S. 47:6022(A), (C)(4)(c)(i), (5), (10)(b), and (14), (D)(2), and (E)9
through (J) are hereby amended and reenacted to read as follows: 10
ยง6022. Digital interactive media producer and software tax credit11
A. Short title. This Section shall be known and may be referred to as the12
"Louisiana Digital Media and Software Act".13
* * *14
C. 15
* * *16
(4)17
* * *18
(c) 19 HLS 11RS-401 ORIGINAL
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(i) Software development primarily designed and developed for institutional,1
private, or internal purposes primarily for internal or operational purposes of the2
company.3
* * *4
(5) "Digital interactive media company Company" means an entity organized5
under the laws of the state of Louisiana authorized to do business in the state of6
Louisiana and engaged in the business of producing digital interactive media as7
defined in this Section. Digital interactive media company Companyshall not mean8
or include any company owned, affiliated, or controlled, in whole or in part, by any9
company or person which:10
(a) Which has a contract or application with the Department of Economic11
Development that is in default or noncompliance;12
(b) Which is in default on a loan made by the state or a loan guaranteed by13
the state ,nor with any company or person who; or 14
(c) Who has ever declared bankruptcy under which an obligation of the15
company or person to pay or repay public funds or monies was discharged as a part16
of such bankruptcy.17
* * *18
(10)19
* * *20
(b) "Production expenses" shall not include postproduction expenditures for:21
(i) Expenditures for or related to marketing, promotion and distribution, non-22
production related overhead, amounts,;23
(ii) Administrative, payroll, and management services which are not directly24
related to management of the project;25
(iii) Food, entertainment, and lodging expenses; 26
(iv) Amounts that are later reimbursed by the state or any other27
governmental entity, costs;28
(v) Costs related to the transfer of tax credits, amounts;29 HLS 11RS-401 ORIGINAL
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(vi) Amounts that are paid to persons or entities as a result of their1
participation in profits from the exploitation of the production,the; or2
(vii) Any application fee, or state or local taxes.3
* * *4
(14) "Tax credit" means the digital interactive media producer and software5
development tax credit authorized by this Section.6
D. 7
* * *8
(2) For applications for state-certified productions submitted to the office on9
or after July 1, 2009, and subsequently approved by the office and secretary, there10
are hereby authorized tax credits which shall be earned by a digital interactive media11
company at the time funds are expended in Louisiana on a state-certified production12
as follows:13
(a) A digital interactive media company shall earn tax credits Credits shall14
be earned at the rate of twenty-five percent of the base investment.15
(b) To the extent that base investment is expended on payroll for Louisiana16
residents employed in connection with a state-certified production, a digital17
interactive media company shall earn additional tax credits shall be earned at the rate18
of ten percent of the payroll.19
(c) The initial certification shall be effective for expenditures made prior to20
the date of initial certification and shall be valid until the production is completed.21
E. Application of the credit Use of tax credits.22
(1) The credit For tax credits earned for expenditures made on or before23
December 31, 2011: 24
(a) The credit shall be allowed against the income or franchise tax due from25
a taxpayer for the taxable period in which the credit is earned as well as the26
immediately preceding period. If the tax credit allowed pursuant to this Section27
exceeds the amount of such taxes due from a taxpayer, then any unused credit may28
be carried forward by the taxpaye r as a credit against subsequent tax liability for a29 HLS 11RS-401 ORIGINAL
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period not to exceed ten years. However, in no event shall the amount of the tax1
credit applied by a taxpayer in a taxable period exceed the amount of such taxes due2
from the taxpayer for that taxable period.3
(2) (b) All entities taxed as corporations for Louisiana income tax purposes4
shall claim their share of any credit allowed under this Section on their corporation5
income and franchise tax return. 6
(3) (c) Individuals, estates, and trusts shall claim their share of any credit7
allowed under this Section on their individual income tax return.8
(4) (d) Entities not taxed as corporations shall claim their share of any credit9
allowed under this Section on the returns of the partners or members as follows: 10
(a) (i) Corporate partners or members shall claim their share of the any credit11
on their corporation income tax returns.12
(b) (ii) Individual partners or members shall claim their share of the any13
credit on their individual income tax returns.14
(c) (iii) Partners or members that are estates or trusts shall claim their share15
of the any credit on their fiduciary income tax returns.16
F. Transferability of the credit.17
(1) (e) Any tax credits allocated to a person and not previously claimed by18
any taxpayer against his Louisiana state income or franchise tax may be transferred19
or sold by such person to another person, subject to the following conditions:20
(a) (i) A single transfer or sale may involve one or more transferees. The21
transferee of the tax credits may transfer or sell such tax credits subject to the22
conditions of this Section.23
(b) (ii) Transferors and transferees shall submit to the office and Department24
of Revenue in writing, a notification of any transfer or sale of tax credits within25
thirty days after the transfer or sale of such tax credits. The notification shall include26
the transferor's tax credit balance prior to transfer, the state-certified production27
number, the name of the state-certified production, the transferor's remaining tax28
credit balance after transfer, all tax identification numbers for both transferor and29 HLS 11RS-401 ORIGINAL
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transferee, the date of transfer, the amount transferred, a copy of the tax credit1
certificate, and any other information required by the office or the Department of2
Revenue.3
(c) (iii) Failure to comply with this Subparagraph will result in the4
disallowance of the tax credit until the taxpayers are in full compliance.5
(d) (iv) The transfer or sale of this credit does not extend the time in which6
the credit can be used. The carry forward carryforward period for credit that is7
transferred or sold begins on the date on which the credit was originally earned.8
(e) (v) The transferee shall apply such credits in the same manner and against9
the same taxes as the taxpayer originally awarded the credit.10
(2) For tax credits earned for expenditures made on or after January 1, 2012:11
(a) The tax credits shall be refundable and allowed against the individual or12
corporate income tax liability of the companies or financiers of the project in13
accordance with their share of the credit as provided for in the application for14
certification for the project. The credit shall be allowed for the taxable period in15
which expenditures eligible for a credit are expended. Any excess of the credit over16
the income tax liability against which the credit may be applied shall constitute an17
overpayment, as defined in R.S. 47:1621(A), and the secretary of the Department of18
Revenue shall make a refund of such overpayment from the current collections of the19
taxes imposed by Chapter 1 of Subtitle II of this Title, as amended. The right to a20
refund of any such overpayment shall not be subject to the requirements of R.S.21
47:1621(B).22
(b) At the time of final certification of tax credits, a company may elect, on23
a one-time basis, to receive a rebate of the credits. The amount of the rebate shall24
be eighty-five percent of the face value of the credits. Upon receipt of the final tax25
credit certification letter and any necessary additional information, the secretary of26
the Department of Revenue shall make payment to the company, or its irrevocable27
designee, which may include but not be limited to a bank or other lender, in the28 HLS 11RS-401 ORIGINAL
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amount to which he is entitled from the current collections of the taxes collected1
pursuant to Chapter 1 of Subtitle II of this Title, as amended.2
* * *3
G. Certification and administration. (1) The office shall determine through4
the promulgation of F. Administration. (1) The office may promulgate rules in5
accordance with the Administrative Procedure Act to establish the policies and6
program elements regarding project qualifications for state-certified productions and7
any other matter necessary to carry out the intent and purposes of this Section. Such8
rules shall be subject to oversight by the House Committee on Ways and Means and9
the Senate Committee on Revenue and Fiscal Affairs.10
(a) what projects qualify as state-certified productions , and11
(b) any Any other matter necessary to carry out the intent and purposes of12
this Section. These rules shall not be effective until they are approved by the House13
Committee on Ways and Means and the Senate Committee on Revenue and Fiscal14
Affairs.15
(2) Application. A company seeking to participate in the tax credit program16
shall apply to the department through an application process established by the17
department.18
(2)(a) The (3) Certification. (a) The office shall review the company's19
application and any other information which it deems appropriate for determination20
of the project's eligibility for initial certification. For a project deemed eligible, the21
office shall submit provide an initial certification of a the project as a state-certified22
production to each digital interactive media the company and to the secretary of the23
Department of Revenue. The initial certification shall be effective for expenditures24
made no more than six months prior to the date of initial certification and shall be25
valid until the project is completed. The initial certification shall include a unique26
identifying number for each state-certified production.27
(b) Prior to final certification of tax credits of a state-certified production or28
any portion thereof, the digital interactive media company shall submit to the office29 HLS 11RS-401 ORIGINAL
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a cost report of production expenditures. The cost report of expenditures shall be1
subject to an agreed-upon procedures engagement conducted by a certified public2
accountant in accordance with statements on standards for attestation engagements3
established by the American Institute of Certified Public Accountants. The4
accountant shall issue a the cost report in the form of procedures and findings. The5
accountant shall be a certified public accountant licensed in the state of Louisiana6
and shall be an independent third party unrelated to the digital interactive media7
company. The agreed-upon procedures shall be established by the office and8
secretary, with assistance from the Society of Louisiana Certified Public9
Accountants, and shall be placed in rules promulgated in accordance with the10
Administrative Procedure Act. The department may request additional audits of the11
project expenditures, the cost of which shall be borne by the company.12
(c) Upon completion of all or a portion of a state-certified production, the13
office shall review the production expenses and, if approved by the office and14
secretary, issue a final tax credit certification letter to the digital interactive media15
company. The certification letter shall include the identifying number assigned to16
that state-certified production in the initial certification.17
(d) As a condition for receiving certification of tax credits under this Section,18
state-certified productions may be required to display the state brand or logo, or both,19
as prescribed by the secretary of the Department of Economic Development.20
(3) Any taxpayer applying for the credit shall be required to reimburse the21
department for any audits required in relation to granting the credit.22
H. G. Recapture of credits. If the office finds that funds for which a digital23
interactive media company received credits according to this Section are not actually24
expended in Louisiana as a production-related cost of a state-certified production,25
then the digital interactive media company's state income tax for such taxable period26
shall be increased by such amount necessary for the recapture of credit provided by27
this Section.28 HLS 11RS-401 ORIGINAL
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I. H. Recovery of credits by Department of Revenue. (1) Credits previously1
granted to a taxpayer, but later disallowed, may be recovered by the secretary of the2
Department of Revenue through any collection remedy authorized by R.S. 47:15613
and initiated within three years from December thirty-first of the year in which the4
credits were earned.5
(2) The only interest that may be assessed and collected on recovered credits6
is interest at a rate of three percentage points above the rate provided in R.S.7
9:3500(B)(1), which shall be computed from the original due date of the return on8
which the credit was taken.9
(3) The provisions of this Subsection are in addition to and shall not limit the10
authority of the secretary of the Department of Revenue to assess or to collect under11
any other provision of law.12
J.I. The provisions of this Section shall not apply to any investments or13
expenditures that qualify for tax credits under R.S. 47:6007.14
J. A taxpayer shall not receive any other state tax credit, exemption,15
exclusion, deduction, rebate, or any other tax benefit for any expenditures for which16
the taxpayer has earned a tax credit under this Section.17
Section 2. R.S. 47:6022(K) is hereby repealed in its entirety.18
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Henry HB No. 248
Abstract: Changes the digital interactive media producer tax credit from a transferrable tax
credit to a refundable credit which may be converted to a rebate and provides for
other program modifications.
Present law provides for the digital interactive media producer tax credit which is applicable
to income and corporation franchise taxes. The tax credit is transferrable.
Proposed law retains present law for credits earned for expenditures made on or before Dec.
31, 2011. Proposed law changes the name of the tax credit from digital interactive media
and producer tax credit to digital interactive media and software development tax credit.
Proposed law changes present law for tax credits earned for expenditures made on or after
Jan. 1, 2012. The applicability of the tax credit is changed from a transferable tax credit to HLS 11RS-401 ORIGINAL
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a refundable tax credit which may be converted to a rebate equal to 85% of the face value
of the tax credit.
Proposed law authorizes a company to elect on a one-time basis, at the time of final
certification of the tax credit, to receive a rebate in lieu of a tax credit. The amount of the
rebate is 85% of the face value of the credit. Rebates are payable by the secretary of the
Dept. of Revenue from current collections.
Present law provides for definitions, including "production expenses".
Proposed law retains present law and specifies that "production expenses" shall not include
food, entertainment and lodging expenses, and administrative, payroll, and management
services which are not directly related to management of the project.
Present law requires administrative rules promulgated by the Dept. of Economic
Development to be approved by the House Committee on Ways and Means and the Senate
Committee on Revenue and Fiscal Affairs before taking effect.
Proposed law retains present law and requires that oversight by those committees be
conducted in accordance with the Administrative Procedure Act.
Proposed law specifies that a company seeking to participate in the tax credit program must
apply to the department through an application process established by the department.
Present law provides for "initial certification" for a company seeking to participate in the tax
credit program.
Proposed law retains present law and specifies that an initial certification shall be limited to
expenses incurred no more than six months prior to the date of initial certification.
Present law restricts a project which earns a tax credit authorized under present law from
eligibility for tax credits or rebates provided under the La. Quality Jobs Program Act.
Proposed law retains present law and broadens the restriction to include any state tax credit,
exemption, exclusion, deduction, rebate, or any other tax benefit for any expenditures for
which the taxpayer has earned a tax credit under proposed law.
(Amends R.S. 47:6022(A), (C)(4)(c)(i), (5), (10)(b), and (14), (D)(2), and (E) - (J); Repeals
R.S. 47:6022(K))