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)]
HB 735 Reengrossed 2015 Regular Session Stokes
Abstract: Requires the withholding of income tax on payments to all individuals who are paid for
the performance of services that are considered a production expenditure eligible for motion
picture investor tax credits.
Present law allows a motion picture investor tax credit in an amount equal to a certain percentage
of the "base investment" made in a state-certified production. The "base investment" is a cash or
cash equivalent investment made and used for "production expenditures" in the state. "Production
expenditures" includes compensation paid to employees for services related to the production.
Proposed law specifies that any individual receiving any payments for the performance of services
used directly in a production activity, and claimed as a production expenditure for certification of
a tax credit (individual), is deemed to be receiving La. taxable income whether directly, or indirectly
through an agent or agency, loan-out company, a personal service company, an employee leasing
company, or other entity.
Proposed law provides that any motion picture production company, motion picture payroll services
company, or other entity (company) making or causing to be made payments to an individual, or to
an agent or agency, loan-out company, personal service company, employee leasing company, or
other entity is considered to be paying compensation taxable by the state. For purposes of eligibility
of payments for certification of tax credits, the company is required to withhold taxes from those
payments at the rate of 6%.
Proposed law requires the company to electronically report and remit the withholdings made
pursuant to proposed law to the Dept. of Revenue quarterly, and to annually electronically report a
list of all individual payees in a format approved by the department. The Dept. of Revenue is
authorized to share with the Dept. of Economic Development information contained in the report,
in accordance with confidentiality requirements of present law regarding the exchange of information
between these two departments. The report shall contain the following information:
(1)Name, address, ownership structure, and taxpayer identification number of the loan- out
company, if any.
(2)Identification of tax type: C Corp; S Corp; or L.L.C. with tax type specified, if applicable.
(3)Name, address, and social security number of the payee. (4)An estimated amount of what the loan-out company will pay the payee, if applicable.
(5)An affirmative statement of whether the payee is a related party to the loan-out company, and
if so, provision of an affidavit stating that the transaction is valued at the same value that an
unrelated party would value the same transaction, if applicable.
Proposed law authorizes the Dept. of Revenue to collect a one-time fee of $200 per production for
purposes of administering the reporting provisions required by proposed law.
Proposed law redefines "payroll" for purposes of the motion picture investor tax credit to include per
diem, housing, box rentals, and any other type of benefit paid to an individual for the performance
of services in a production. Proposed law further requires taxes to be withheld and remitted to the
Dept. of Revenue in accordance with proposed law in order for the payroll to be qualified as "base
investment" for purposes of the tax credit.
Applicable to productions receiving initial certification on or after Jan. 1, 2016.
Effective Aug. 1, 2015.
(Amends R.S. 47:164(D) and 6007(B)(8) and (D)(5))
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Ways and Means to the original
bill:
1. Add authority for the Dept. of Revenue to share with the Dept. of Economic
Development certain information contained in reports regarding income tax withholding
for certain persons.
2. Change the amount of the fee to be charged by the Dept. of Revenue for administration
of the reporting requirements relative to income tax withholding for certain persons from
30% of the tax credit transfer fee to $200 per production.
The House Floor Amendments to the engrossed bill:
1. Made Technical amendments.