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Regular Session, 2011 ENROLLED
SENATE BILL NO. 123
BY SENATORS MARTINY, MORRELL AND MURRAY
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), to enact R.S. 47:6038 and R.S. 51:2306, and to repeal R.S. 47:6022(K),3
relative to tax credits; to provide for the name and applicability of the digital4
interactive media producer tax credit; to provide for a refundable tax credit; to5
provide for rebates of tax credits under certain circumstances; to provide for6
definitions, limitations, and program administration; to require reports by the7
secretary of the Department of Economic Development; and to provide for related8
matters.9
Be it enacted by the Legislature of Louisiana:10
Section 1. R.S. 47:6022(A), (C)(4)(c)(i), (5), (10)(b), and (14), (D)(2), and (E)11
through (J) are hereby amended and reenacted and R.S. 47:6038 is hereby enacted to read12
as follows: 13
§6022. Digital interactive media producer and software tax credit14
A. Short title. This Section shall be known and may be referred to as the15
"Louisiana Digital Media and Software Act".16
* * *17
C.18
* * *19
(4)20
* * *21
(c)22
(i) Software development primarily designed and developed for institutional,23
private, or internal purposes primarily for internal or operational purposes of the24
ACT No. 415 SB NO. 123 ENROLLED
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company.1
* * *2
(5) "Digital interactive media company Company" means an entity organized3
under the laws of the state of Louisiana authorized to do business in the state of4
Louisiana and engaged in the business of producing digital interactive media as5
defined in this Section. Digital interactive media company "Company" shall not6
mean or include any company owned, affiliated, or controlled, in whole or in part,7
by any company or person which subject to any of the following:8
(a) Has a contract or application with the Department of Economic9
Development that is in default or noncompliance.10
(b) is Is in default on a loan made by the state or a loan guaranteed by the11
state, nor with any company or person who.12
(c) has Has ever declared bankruptcy under which an obligation of the13
company or person to pay or repay public funds or monies was discharged as a part14
of such bankruptcy.15
* * *16
(10)17
* * *18
(b) "Production expenses" shall not include postproduction expenditures for19
any of the following:20
(i) Expenditures for or related to marketing, promotion and distribution;.21
non-production related overhead, amounts,.22
(ii) Administrative, payroll, and management services which are not23
directly related to management of the state-certified production.24
(iii) Food, entertainment, and lodging expenses.25
(iv) Amounts that are later reimbursed by the state or any other governmental26
entity, costs.27
(v) Costs related to the transfer of tax credits, amounts.28
(vi) Amounts that are paid to persons or entities as a result of their29
participation in profits from the exploitation of the production, the; .30 SB NO. 123 ENROLLED
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(vii) Any application fee, or state or local taxes.1
* * *2
(14) "Tax credit" means the digital interactive media producer and software3
development tax credit authorized by this Section.4
D.5
* * *6
(2) For applications for state-certified productions submitted to the office on7
or after July 1, 2009, and subsequently approved by the office and secretary, there8
are hereby authorized tax credits which shall be earned by a digital interactive media9
company at the time funds are expended in Louisiana on a state-certified production10
as follows:11
(a) A digital interactive media company shall earn tax credits Credits shall12
be earned at the rate of twenty-five percent of the base investment.13
(b) To the extent that base investment is expended on payroll for Louisiana14
residents employed in connection with a state-certified production, a digital15
interactive media company shall earn additional tax credits shall be earned at the16
rate of ten percent of the payroll.17
(c) The initial certification shall be effective for expenditures made prior to18
the date of initial certification and shall be valid until the production is completed.19
E. Application of the credit Use of tax credits20
(1) The credit For tax credits earned for expenditures made on or before21
December 31, 2011:22
(a) The credit shall be allowed against the income or franchise tax due from23
a taxpayer for the taxable period in which the credit is earned as well as the24
immediately preceding period. If the tax credit allowed pursuant to this Section25
exceeds the amount of such taxes due from a taxpayer, then any unused credit may26
be carried forward by the taxpayer as a credit against subsequent tax liability for a27
period not to exceed ten years. However, in no event shall the amount of the tax28
credit applied by a taxpayer in a taxable period exceed the amount of such taxes due29
from the taxpayer for that taxable period.30 SB NO. 123 ENROLLED
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(2) (b) All entities taxed as corporations for Louisiana income tax purposes1
shall claim any credit allowed under this Section on their corporation income and2
franchise tax return.3
(3) (c) Individuals, estates, and trusts shall claim their share of any credit4
allowed under this Section on their individual income tax return.5
(4) (d) Entities not taxed as corporations shall claim their share of any credit6
allowed under this Section on the returns of the partners or members as follows:7
(a) (i) Corporate partners or members shall claim their share of the any credit on8
their corporation income tax returns.9
(b) (ii) Individual partners or members shall claim their share of the any credit on10
their individual income tax returns.11
(c) (iii) Partners or members that are estates or trusts shall claim their share of the12
any credit on their fiduciary income tax returns.13
F. Transferability of the credit14
(1) (e) Any tax credits allocated to a person and not previously claimed by any15
taxpayer against his Louisiana state income or franchise tax may be transferred or sold16
by such person to another person, subject to the following conditions:17
(a) (i) A single transfer or sale may involve one or more transferees. The18
transferee of the tax credits may transfer or sell such tax credits subject to the conditions19
of this Section.20
(b) (ii) Transferors and transferees shall submit to the office and Department of21
Revenue in writing, a notification of any transfer or sale of tax credits within thirty days22
after the transfer or sale of such tax credits. The notification shall include the transferor's23
tax credit balance prior to transfer, the state-certified production number, the name of the24
state-certified production, the transferor's remaining tax credit balance after transfer, all25
tax identification numbers for both transferor and transferee, the date of transfer, the26
amount transferred, a copy of the tax credit certificate, and any other information required27
by the office or the Department of Revenue.28
(c) (iii) Failure to comply with this Paragraph will result in the disallowance of29
the tax credit until the taxpayers are in full compliance.30 SB NO. 123 ENROLLED
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(d) (iv) The transfer or sale of this credit does not extend the time in which the1
credit can be used. The carry forward carryforward period for credit that is transferred2
or sold begins on the date on which the credit was originally earned.3
(e) (v) The transferee shall apply such credits in the same manner and against the4
same taxes as the taxpayer originally awarded the credit.5
(2) For tax credits earned for expenditures made on or after January 1, 2012:6
(a) The tax credits shall be refundable and allowed against the individual or7
corporate income tax liability of the companies or financiers of the project in8
accordance with their share of the credit as provided for in the application for9
certification for the project. The credit shall be allowed for the taxable period in10
which expenditures eligible for a credit are expended as set forth in the final tax11
credit certification letter. Any excess of the credit over the income tax liability12
against which the credit may be applied shall constitute an overpayment, as defined13
in R.S. 47:1621(A), and the secretary of the Department of Revenue shall make a14
refund of such overpayment from the current collections of the taxes imposed by15
Chapter 1 of Subtitle II of this Title, as amended. The right to a refund of any such16
overpayment shall not be subject to the requirements of R.S. 47:1621(B).17
(b) At the time of final certification of tax credits, a company may elect, on18
a one-time basis, to receive a rebate of the credits. The amount of the rebate shall be19
eighty-five percent of the face value of the credits. Upon receipt of the final tax credit20
certification letter and any necessary additional information, the secretary of the21
Department of Revenue shall make payment to the company, or its irrevocable22
designee, which may include but not be limited to a bank or other lender, in the23
amount to which he is entitled from the current collections of the taxes collected24
pursuant to Chapter 1 of Subtitle II of this Title, as amended.25
G. Certification and administration. (1) The office shall determine through the26
promulgation of F. Administration. (1) The office may promulgate rules in accordance27
with the Administrative Procedure Act to establish the policies and program elements28
regarding project qualifications of state-certified productions and any other matter29
necessary to carry out the intent and purposes of this Section. Such rules shall be30 SB NO. 123 ENROLLED
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subject to oversight by the House Committee on Ways and Means and the Senate1
Committee on Revenue and Fiscal Affairs.2
(a) what projects qualify as state-certified productions and3
(b) any other matter necessary to carry out the intent and purposes of this Section.4
These rules shall not be effective until they are approved by the House Committee on5
Ways and Means and the Senate Committee on Revenue and Fiscal Affairs.6
(2) Application. A company seeking to participate in the tax credit program7
shall apply to the department through an application process established by the8
department.9
(2)(a) The (3) Certification. (a) The office shall review the company's10
application and any other information which it deems appropriate for determination11
of the project's eligibility for initial certification. For a project deemed eligible, the12
office shall submit provide an initial certification of a the project as a state-certified13
production to each digital interactive media the company and to the secretary of the14
Department of Revenue. The initial certification shall be effective for expenditures15
made no more than six months prior to the date of initial certification and shall be16
valid until the project is completed. The initial certification shall include a unique17
identifying number for each state-certified production.18
(b) Prior to final certification of tax credits of a state-certified production or any19
portion thereof, the digital interactive media company shall submit to the office a cost20
report of production expenditures. The cost report of expenditures shall be subject to an21
agreed-upon procedures engagement conducted by a certified public accountant in22
accordance with statements on standards for attestation engagements established by the23
American Institute of Certified Public Accountants. The accountant shall issue a report24
in the form of procedures and findings. The accountant shall be a certified public25
accountant licensed in the state of Louisiana and shall be an independent third party26
unrelated to the digital interactive media company. The agreed-upon procedures shall be27
established by the office and secretary, with assistance from the Society of Louisiana28
Certified Public Accountants, and shall be placed in rules promulgated in accordance with29
the Administrative Procedure Act. The department may request additional audits of30 SB NO. 123 ENROLLED
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the project expenditures, the cost of which shall be borne by the company.1
(c) Upon completion of all or a portion of a state-certified production, the office2
shall review the production expenses and, if approved by the office and secretary, issue3
a final tax credit certification letter to the digital interactive media company. The4
certification letter shall include the identifying number assigned to that state-certified5
production in the initial certification.6
(d) As a condition for receiving certification of tax credits under this Section,7
state-certified productions may be required to display the state brand or logo, or both, as8
prescribed by the secretary of the Department of Economic Development.9
(3) Any taxpaye r applying for the credit shall be required to reimburse the10
department for any audits required in relation to granting the credit.11
H. G. Recapture of credits. If the office finds that funds for which a digital12
interactive media company received credits according to this Section are not actually13
expended in Louisiana as a production-related cost of a state-certified production, then14
the digital interactive media company's state income tax for such taxable period shall be15
increased by such amount necessary for the recapture of credit provided by this Section.16
I. H. Recovery of credits by Department of Revenue. (1) Credits previously17
granted to a taxpayer, but later disallowed, may be recovered by the secretary of the18
Department of Revenue through any collection remedy authorized by R.S. 47:1561 and19
initiated within three years from December thirty-first of the year in which the credits20
were earned.21
(2) The only interest that may be assessed and collected on recovered credits is22
interest at a rate of three percentage points above the rate provided in R.S. 9:3500(B)(1),23
which shall be computed from the original due date of the return on which the credit was24
taken.25
(3) The provisions of this Subsection are in addition to and shall not limit the26
authority of the secretary of the Department of Revenue to assess or to collect under any27
other provision of law.28
J. I. The provisions of this Section shall not apply to any investments or29
expenditures that qualify for tax credits under R.S. 47:6007.30 SB NO. 123 ENROLLED
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J. A taxpayer shall not receive any other incentive administered by the1
Department of Economic Development for any expenditures for which the taxpayer2
has received a tax credit or tax rebate under this Section.3
* * *4
§6038. Reports; tax incentives administered by the Department of Economic5
Development6
Notwithstanding any provision of law to the contrary, the secretary of the7
Department of Economic Development shall report to the Joint Legislative8
Committee on the Budget information concerning the granting and denial of tax9
credits and rebates, hereinafter referred to as "tax incentives", administered by the10
department authorized under this Chapter. On January 30
th
of each year, the11
secretary shall transmit to the members of the committee a list of the recipients of12
each tax incentive, as well as a list of applicants denied tax incentives, over the most13
recently concluded calendar year. The report shall contain the name and primary14
place of business of each applicant.15
Section 2. R.S. 51:2306 is hereby enacted to react as follows: 16
§2306. Reports; tax incentives administered by the Department of Economic17
Development18
Notwithstanding any provision of law to the contrary, the secretary of the19
Department of Economic Development shall report to the Joint Legislative20
Committee on the Budget information concerning the granting and denial of tax21
credits and rebates, hereinafter referred to as "tax incentives", administered by the22
department authorized under this Title. On January 30
th
of each year, the secretary23
shall transmit to the members of the committee a list of the recipients of each tax24
incentive, as well as a list of applicants denied tax incentives, over the most recently25
concluded calendar year. The report shall contain the name and primary place of26
business of each applicant.27
Section 3. R.S. 47:6022(K) is hereby repealed in its entirety.28
Section 4. This Act shall become effective upon signature by the governor or, if not29
signed by the governor, upon expiration of the time for bills to become law without signature by30 SB NO. 123 ENROLLED
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the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If vetoed1
by the governor and subsequently approved by the legislature, this Act shall become effective on2
the day following such approval.3
PRESIDENT OF THE SENATE
SPEAKER OF THE HOUSE OF REPRESENTATIVES
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED: