HLS 13RS-396 ORIGINAL
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Regular Session, 2013
HOUSE BILL NO. 283
BY REPRESENTATIVE LEGER
TAX CREDITS: Provides relative to tax credits for state-certified musical or theatrical
productions and state-certified infrastructure projects
AN ACT1
To amend and reenact R.S. 47:6034(A), (B)(3), (5), (7)(a), (9), and (10)(a),2
(C)(1)(introductory paragraph), (a), and (d), and (E)(1)(c)(i) and (2)(a)(i)(ff), relative3
to income tax credits; to provide relative to tax credits for state-certified musical or4
theatrical productions and state-certified infrastructure projects; to provide relative5
to the tax credit for certain payroll; to provide relative to certain definitions; to6
extend issuance of the tax credit for certain state-certified infrastructure projects; to7
provide for certain requirements; to provide relative to the application for such tax8
credits and certification of productions and projects; to provide for an effective date;9
and to provide for related matters.10
Be it enacted by the Legislature of Louisiana:11
Section 1. R.S. 47:6034(A), (B)(3), (5), (7)(a), (9), and (10)(a), (C)(1)(introductory12
paragraph), (a), and (d), and (E)(1)(c)(i) and (2)(a)(i)(ff) are hereby amended and reenacted13
to read as follows: 14
ยง6034. Musical and theatrical production income tax credit15
A. Purpose. It is the intention of the legislature in creating these five16
different types of tax credits: a credit for qualified production expenditures made17
from investments in a state-certified musical or theatrical production; a credit for the18
construction, repair, or renovation of facilities related to such productions and19
performances; a credit for qualified transportation costs for performance-related20 HLS 13RS-396 ORIGINAL
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property; a credit for the payroll of Louisiana residents employed in connection with1
a state-certified musical or theatrical production; and a credit for employing college,2
university, and vocational-technical students employed in connection with a state-3
certified musical or theatrical production, to establish and promote Louisiana as one4
of the primary places in the United States in which live performances, from creation5
to presentation are present and thriving. The live performance industry will enhance6
economic development because it fits well with the state's reputation as a tourist7
destination, will offer numerous and varied employment opportunities, and in8
conjunction with the available federal and state incentives, will be an attraction for9
new and relocating businesses and will provide for the reinventing of countless10
abandoned properties as either performance or rehearsal spaces. The live11
performance industry will also spur educational development: Louisiana colleges,12
universities, and vocational-technical schools will be able to offer talented13
undergraduate and graduate students from this state, other states, and around the14
world a real-world opportunity to participate in degree programs across the state that15
work on the various productions in accounting, law, management, and marketing and16
to fill arts-related positions such as actors, writers, producers, stagehands, and17
directors, as well as technicians working on all aspects of the production such as18
lighting, sound, and actual stage production and operations. In addition, Louisiana19
has the opportunity to centralize much of the concert touring industry by serving as20
a place where artists, performers, technicians, crew, vendors, and other service21
providers are welcome and encouraged to do business.22
B. Definitions. For the purposes of this Section:23
* * *24
(3) "Expended in the state" or "expenditures in the state" means an25
expenditure to acquire or lease immovable property located in the state, an26
expenditure to acquire movable property from a source within the state which is27
subject to state sales and use tax, or an expenditure as compensation for services28
performed within the state which is subject to state income tax. A transaction that29 HLS 13RS-396 ORIGINAL
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is subject to state sales and use tax shall include transactions which are also eligible1
for statutory exclusions or exemptions.2
* * *3
(5) "Musical or theatrical production" means the producing, rehearsing,4
marketing, administration, recording, performing, servicing, and/or filming of a live5
musical or theatrical performance in the state before live audiences, the costs of6
which are not certified for other tax credits provided for in Louisiana law, whether7
or not there is a charge for admission. Such performances shall include, but not be8
limited to drama, comedy, comedy revue, opera, ballet, jazz, cabaret, concerts,9
multistate and multinational concert tours, and variety entertainment.10
* * *11
(7)(a) "Production expenditures" means a contemporaneous exchange of12
cash or cash equivalent for goods or services related to development, production, or13
operating expenditures in this state for a state-certified musical or theatrical14
production, including but not limited to expenditures for set construction and15
operation, including special and visual effects, costumes, wardrobes, make-up16
makeup, accessories, costs associated with sound, lighting, transportation, staging,17
payroll, finance, and other related costs. For purposes of determining the portion of18
an artist or performer's compensation that constitutes production expenditures, a19
valid and enforceable guarantee signed by a promoter, producer, or other guarantor20
shall be deemed as the portion of such artist or performer's compensation that is not21
related to profits from the exploitation of the production. The proportion of the22
guaranteed compensation that shall constitute a qualifying production expenditure23
shall be determined by multiplying the amount of guaranteed compensation by a24
fraction, the numerator of which is the total number of duty days inclusive of25
development and rehearsal days spent working on the production within the state and26
the denominator of which is the total number of performances plus Louisiana duty27
days.28
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(9) "State-certified musical or theatrical facility infrastructure project" or1
"state-certified infrastructure project" means a capital infrastructure project in the2
state directly related to the production, servicing, or performance of musical or3
theatrical productions as defined in this Section, and movable and immovable4
property and equipment related thereto, or any other facility which supports and is5
a necessary component of such facility, and any expenditures in the state related to6
the construction, repair, or renovation of such project, which are certified, verified,7
and approved as provided for in this Section. A state-certified musical or theatrical8
facility infrastructure project shall include the creation, development, or acquisition9
of vendor operations and the costs related thereto designed to service musical or10
theatrical productions, regardless if such productions are in-state, multistate, or11
multinational productions, from a base of operations within Louisiana.12
(10)(a) "State-certified musical or theatrical production" means a musical or13
theatrical production, including concerts and multistate and multinational concert14
tours, or a series of productions occurring over the course of a twelve-month period,15
and the recording or filming of such production, which originate, are developed, or16
have their initial public performance before an audience within Louisiana, or which17
have their United States debut within Louisiana, and the production expenditures,18
expenditures for the payroll of residents, transportation expenditures, and19
expenditures for employing college and vocational-technical students related to such20
production or productions, that are certified, verified, and approved as provided for21
in this Section. Non-qualifying Nonqualifying projects include, but are not limited22
to non-touring music and cultural festivals, industry seminars, and trade shows.23
* * *24
C. Income tax credits for state-certified productions and state-certified25
musical or theatrical facility infrastructure projects:26
(1) There is hereby authorized the The following types of credits against the27
state income tax are hereby authorized:28 HLS 13RS-396 ORIGINAL
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(a)(i)(aa) A base investment credit may shall be granted for certified,1
verified, and approved production expenditures for a state-certified musical or2
theatrical production, or for investments made by a company or a financier in such3
production which are, in turn, expended for such production expenditures.4
(bb) The initial certification shall be effective for a period of twelve months5
prior to and twelve months after the date of initial certification.6
(ii)(aa) Until January 1, 2014 2022, a base investment credit may be granted7
for certified, verified, and approved expenditures in the state for the creation,8
development, acquisition, construction, repair, or renovation of a state-certified9
musical or theatrical facility infrastructure project, or for investments made by a10
company or a financier in such infrastructure project which are, in turn, expended for11
such construction, repair, or renovation, not to exceed ten million dollars per state-12
certified infrastructure project, under conditions provided for in this Item. No more13
than sixty million dollars in tax credits under this Section shall be granted for14
infrastructure projects per year. If twenty-five percent of the total base investment15
provided for in the initial certification of a state-certified musical or theatrical facility16
infrastructure project has been expended prior to January 1, 2022, then the state-17
certified musical or theatrical facility infrastructure project shall continue to earn18
base investment credits as funds are expended until such time as all of the funds19
provided for in the initial certification have been expended.20
(bb) If all or a portion of an infrastructure project is a facility which may be21
used for other purposes not directly related to the production or performance of22
musical or theatrical production activities, then the project shall be approved only if23
a determination is made that the multiple-use facility will support and will be24
necessary to secure musical or theatrical production activities for the musical or25
theatrical production or performance facility and the applicant provides sufficient26
contractual assurances that:27 HLS 13RS-396 ORIGINAL
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(I) The facility will be used for the production or performance of musical or1
theatrical production activities, or as a support and component thereof, for the useful2
life of the facility.3
(II) No tax credits shall be earned on such multiple-use facilities until the4
facility directly used in musical or theatrical productions or performances is5
complete.6
(cc) Tax credits for infrastructure projects shall be earned only as follows:7
(I) Construction, creation, development, or acquisition of the infrastructure8
project shall begin within six months of the initial certification provided for in9
Subparagraph (E)(1)(d) of this Section.10
(II) Expenditures shall be certified, verified, and approved as provided for11
in this Section, and credits are not earned until such certification.12
(III) Twenty-five No credits shall be issued until twenty-five percent of the13
total base investment provided for in the initial certification of an infrastructure14
project pursuant to Subparagraph (E)(1)(d) of this Section shall be certified, verified,15
and approved as expended before any credits may be earned has been expended.16
(IV) No tax credit shall be allowed for expenditures made for any17
infrastructure project two years after its initial certification pursuant to Subparagraph18
(E)(1)(d) of this Section, unless fifty percent of total base investment provided for19
in the initial certification of the project pursuant to such Subparagraph has been20
expended prior to that time. The expenditures may be finally certified at a later date.21
(dd) The initial certification may require the tax credits to be taken and/or22
transferred in the tax period in which the credit is earned or the tax credits may be23
structured in the initial certification of the project to provide that only a portion of24
the tax credit be taken over the course of two or more tax years.25
(iii) Except as limited for state-certified infrastructure projects as provided26
for in this Subparagraph, the base investment credit shall be for the following27
amounts:28 HLS 13RS-396 ORIGINAL
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(aa) If the total base investment is greater than one hundred thousand dollars1
and less than or equal to three hundred thousand dollars, a company shall be allowed2
a tax credit of ten percent of the base investment made by that company.3
(bb) If the total base investment is greater than three hundred thousand4
dollars and less than or equal to one million dollars, a company shall be allowed a5
tax credit of twenty percent of the base investment made by that company.6
(cc) If the total base investment is greater than one million dollars, a7
company shall be allowed a tax credit of twenty-five percent of the base investment8
made by that company.9
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(d) To the extent that base investment is expended on payroll for Louisiana11
residents employed in connection with a state-certified musical or theatrical12
production, except for the students provided for in Subparagraph (c) of this13
Paragraph, or the creation, development, acquisition, or construction of a state-14
certified musical or theatrical facility infrastructure project, a company shall be15
allowed an additional tax credit of ten percent of such payroll; however, if the16
amount paid to any one person exceeds one million dollars, the additional credit shall17
not include any amount paid to that person that exceeds one million dollars.18
* * *19
E. Certification and administration:20
(1)21
* * *22
(c) When determining which musical or theatrical productions or musical or23
theatrical facility infrastructure projects qualify for certification, the Department of24
Economic Development shall take the following factors into consideration:25
(i) The contribution of the production or infrastructure project to establishing26
the state as a leader in the live performance industry or as a central base of vendor27
operations for the industry.28
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(2)(a) Application. An applicant for the tax credit shall submit an1
application for initial certification to the Department of Economic Development that2
includes the following information:3
(i) The application for state-certified productions shall include:4
* * *5
(ff) Estimated dates for start and completion of rehearsals before paid6
performances and the estimated dates of performances in the state and outside of this7
state.8
* * *9
Section 2. The provisions of this Act shall become effective on January 1, 2014, and10
shall be applicable to all tax years beginning on and after January 1, 2014.11
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)]
Leger HB No. 283
Abstract: Extends authority to grant tax credits for state-certified musical or theatrical
facility infrastructure projects from Jan. 1, 2014, to Jan. 1, 2022, and expands the
definitions of "musical or theatrical production", "state-certified musical or theatrical
production" and "state-certified infrastructure project", "expenditures in the state",
and "production expenditures".
Present law authorizes income tax credits for state-certified musical or theatrical productions
and state-certified infrastructure projects. Further provides that, until Jan. 1, 2014, a base
investment credit may be granted for certified, verified, and approved expenditures in the
state for the construction, repair, or renovation of a state-certified infrastructure project, or
for investments made by a company in such infrastructure projects, not to exceed $10
million per project. Present law limits the annual amount of credits issued for infrastructure
projects to $60 million. Requires that credits be granted on a first-come, first-served basis
and if the total amount of credits applied for in a year exceeds the aggregate amount of tax
credits allowed for that year, the excess shall be treated as having been applied for on the
first day of the subsequent year.
Proposed law extends the date for approval of tax credits from Jan. 1, 2014, to Jan. 1, 2022,
and further provides that in addition to issuing credits for the construction, repair, or
renovation of state-certified infrastructure projects, credits shall also be issued for the
creation, development, and acquisition of state-certified infrastructure projects.
Proposed law provides that if 25% of the total base investment provided for in the initial
certification of a state-certified infrastructure project has been expended prior to Jan. 1,
2022, then the project shall continue to earn base investment credits as funds are expended
until such time as all of the funds provided for in the initial certification have been expended. HLS 13RS-396 ORIGINAL
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Present law requires construction of the infrastructure project to begin within six months of
the initial certification of the project and that 25% of the total base investment in the initial
certification be certified, verified, and approved as expended before any credits are earned.
Further provides that credits are not earned until expenditures are certified.
Proposed law changes present law to require that construction, creation, development, or
acquisition of the project begin within six months of initial certification and to provide that
no credits shall be issued until 25% of the total base investment in the initial certification of
an infrastructure project has been expended. Deletes provision that credits are not earned
until expenditures are certified.
Present law provides that the initial certification may require the tax credits to be taken or
transferred in the tax period in which the credit is earned or the tax credits may be structured
in the initial certification of the project to provide that only a portion of the tax credit be
taken over the course of two or more tax years.
Proposed law deletes present law.
Present law provides for an additional tax credit of 10% of payroll expended for La.
residents employed in connection with a state-certified musical or theatrical production,
excluding payroll for certain students, or the construction of a state-certified infrastructure
project; however, the additional credit shall not include any amount paid to any one person
that exceeds $1 million.
Proposed law retains present law but extends the additional tax credit to payroll for La.
residents employed for the creation, development, or acquisition of state-certified
infrastructure projects.
Present law defines "expended in the state" as an expenditure to acquire or lease immovable
property located in the state, an expenditure to acquire movable property from a source
within the state subject to state sales and use tax, or an expenditure as compensation for
services performed within the state subject to state income tax.
Proposed law retains present law but adds that a transaction that is subject to state sales and
use tax shall include transactions which are also subject to a statutory exclusion or
exemption.
Present law defines a "musical or theatrical production" as the producing, rehearsing,
marketing, administration, recording, performing, and/or filming of a live musical or
theatrical performance in the state before live audiences, whether or not there is a charge for
admission. Such performances include drama, comedy, comedy revue, opera, ballet, jazz,
cabaret, and variety entertainment.
Proposed law removes the requirement that such performance be in this state and expands
the definition of "musical or theatrical production" to include the servicing of a musical or
theatrical performance before a live audience. Also includes concerts, multistate and
multinational concert tours to the performances that qualify as "musical or theatrical
productions".
Present law defines "production expenditures" as a contemporaneous exchange of cash or
cash equivalent for goods or services related to development, production, or operating
expenditures in this state for a state-certified musical or theatrical production.
Proposed law retains present law but adds transportation and finance to the list of
expenditures which qualify as "production expenditures". Further adds provisions for
determining the portion of an artist or performer's compensation which constitutes
production expenditures and provisions for the determination of the proportion of the
guaranteed compensation that constitutes a qualifying production expenditure. HLS 13RS-396 ORIGINAL
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are additions.
Present law defines a "state-certified infrastructure project" as a capital infrastructure project
in the state directly related to the production or performance of musical or theatrical
productions and related property and equipment, any facility which supports and is a
necessary component of such facility, and any certified expenditures in the state related to
the construction, repair, or renovation of such project.
Proposed law retains present law but expands the definition to include the servicing of
musical or theatrical productions. Further provides that a state-certified infrastructure
project shall include the creation, development, or acquisition of vendor operations designed
to service musical or theatrical productions, regardless if such productions are in-state,
multistate, or multinational productions, from a base of operations within La.
Present law defines a "state-certified musical or theatrical production" as a musical or
theatrical production, or a series of productions occurring over a 12-month period, and the
recording or filming of such production, which originate, are developed, or have their initial
public performance before an audience within La., or which debut within La., and the
production expenditures, payroll expenditures for residents, transportation expenditures, and
expenditures for employing college and vocational-technical students related to such
production or productions.
Proposed law retains present law but expands the definition of "state-certified musical or
theatrical production" to include concerts and multistate and multinational concert tours.
Present law requires the secretary of the Dept. of Economic Development (DED) to
determine which musical or theatrical productions and which infrastructure projects shall be
certified pursuant to the provisions of present law.
Proposed law retains present law but adds to the list of factors the department should
consider when determining which productions and infrastructure projects are certified the
contribution of the production or infrastructure project in establishing the state as a central
base of vendor operations for the industry.
Present law requires a tax credit applicant to submit an application for initial certification
to DED that includes the estimated dates for start and completion of rehearsals before paid
performances and the estimated dates of performances in the state.
Proposed law retains present law but requires the application to include estimated start and
completion of rehearsals before paid performances and performance dates outside of the
state.
Effective on Jan. 1, 2014, and applicable to tax years beginning on and after that date.
(Amends R.S. 47:6034(A), (B)(3), (5), (7)(a), (9) and (10)(a), (C)(1)(intro.para.), (a), and
(d), and (E)(1)(c)(i) and (2)(a)(i)(ff))