HLS 15RS-396 ENGROSSED
2015 Regular Session
HOUSE BILL NO. 748
BY REPRESENTATIVE STOKES
TAX CREDITS: Provides relative to the motion picture investor tax credit and the motion
picture infrastructure investor tax credit
1 AN ACT
2To amend and reenact R.S. 47:6007(B)(5), (10) through (16), (C)(1)(introductory
3 paragraph), (a)(iii) and (b)(iii), (D)(2)(d)(i), (E), and (F)(1), and to add R.S.
4 47:6007(B)(17), (C)(1), and (c)(iii), (D)(1)(d)(iv) and (v) and (2)(d)(iii), G, and H,
5 relative to income tax credits; to provide with respect to the motion picture investor
6 tax credit; to provide for definitions; to provide eligibility for certain types of
7 productions; to provide requirements for the completion of projects and certification
8 of expenditures; to authorize assignment of credits to a lender under certain
9 circumstances; to provide for recapture of tax credits; to provide for the final
10 certification of certain expenditures for state-certified infrastructure projects; to
11 provide for effectiveness; and to provide for related matters.
12Be it enacted by the Legislature of Louisiana:
13 Section 1. R.S. 47:6007(B)(5), (10) through (16), (C)(1)(introductory paragraph),
14(a)(iii) and (b) (iii), (D)(2)(d)(i), (E), and (F)(1) are hereby amended and reenacted, and R.S.
1547:6007(B)(17), (C)(1)(c)(iii) , (D)(1)(d)(iv) and (v) and (2)(d)(iii), G, and H are hereby
16enacted, to read as follows:
17ยง6007. Motion picture investor tax credit
18 * * *
19 B. Definitions. For the purposes of this Section:
20 * * *
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1 (5) "Motion picture" means a nationally or internationally distributed
2 feature-length film, video, television pilot, television series, television movie of the
3 week, animated feature film, animated television series, or commercial made in
4 Louisiana, in whole or in part, for theatrical or television viewing, or for viewing on
5 any digital online platform as provided by the office. The term "motion picture"
6 shall not include the production of television coverage of news and athletic events.
7 * * *
8 (10) "Production expenditures" means preproduction, production, and
9 postproduction expenditures in this state directly relating to a state-certified
10 production, including without limitation the following: set construction and
11 operation; wardrobes, makeup, accessories, and related services; costs associated
12 with photography and sound synchronization, lighting, and related services and
13 materials; editing and related services; rental of facilities and equipment; leasing of
14 vehicles; costs of food and lodging; digital or tape editing, film processing, transfer
15 of film to tape or digital format, sound mixing, special and visual effects; and
16 payroll. This For all state-certified productions approved on or after January 1, 2004,
17 this term shall not include expenditures for marketing and distribution, non-
18 production related overhead, amounts reimbursed by the state or any other
19 governmental entity, costs related to the transfer of tax credits, amounts that are paid
20 to persons or entities as a result of their participation in profits from the exploitation
21 of the production, the application fee, or state, or local taxes or any expenditures
22 occurring outside of Louisiana.
23 (11) "Project completion" means completion of principal photography, or as
24 otherwise approved in writing by the office.
25 (11)(12) "Qualified accountant" means an independent certified public
26 accountant authorized to practice in this state who has sufficient knowledge of
27 accounting principles and practices generally recognized in the film and television
28 industry.
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1 (12)(13) "Resident" or "resident of Louisiana" means a natural person
2 domiciled in the state. A person who maintains a permanent place of abode within
3 the state and spends in the aggregate more than six months of each year within the
4 state shall be presumed to be domiciled in the state.
5 (13)(14) "Secretary" means the secretary of the Department of Economic
6 Development.
7 (14)(15) "Source within the state" means a physical facility in Louisiana,
8 operating with posted business hours and employing at least one full-time equivalent
9 employee.
10 (15)(16) "State" means the state of Louisiana.
11 (16)(17) "State-certified production" shall mean means a production
12 approved by the office and the secretary which is produced by a motion picture
13 production company domiciled and headquartered in Louisiana and which has a
14 viable multi-market commercial distribution plan.
15 (18) "Taxpayer" means an investor, motion picture production company
16 applicant, individual with an ownership interest in a motion picture production
17 company applicant, or a subsequent transferee of the tax credit.
18 C. Investor tax credit; specific productions and projects.
19 (1) There is hereby authorized a tax credit against state income tax for
20 Louisiana taxpayers for investment in state-certified productions for initial
21 certifications issued on or after January 1, 2016. The tax credit shall be earned by
22 investors at the time expenditures are made by a motion picture production company
23 in a state-certified production when certified by the office, according to the total base
24 investment certified per calendar year, as set forth in the final certification issued to
25 the motion picture production company. However, credits Credits cannot be applied
26 against a tax or transferred until the expenditures are certified by the office and the
27 secretary. For state-certified productions, expenditures shall be certified no more
28 than twice during the duration of a state-certified production unless the motion
29 picture production company agrees to reimburse the office for the costs of any
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1 additional certifications once per production, after project completion. The tax credit
2 shall be calculated as a percentage of the total base investment dollars certified per
3 project.
4 (a) For state-certified productions approved by the office and the secretary
5 on or after January 1, 2004, but before January 1, 2006:
6 * * *
7 (iii) The initial certification shall be effective for qualifying expenditures
8 made within a period twelve months prior to and twelve months after the date of
9 initial certification, unless the production has commenced, in which case the initial
10 certification shall be valid until the production is completed.
11 (b) For state-certified productions approved by the office and the secretary
12 on or after January 1, 2006, but before July 1, 2009:
13 * * *
14 (iii) The initial certification shall be effective for qualifying expenditures
15 made within a period twelve months prior to and twelve months after the date of
16 initial certification, unless the production has commenced, in which case the initial
17 certification shall be valid until the production is completed.
18 (c) For state-certified productions approved by the office and the secretary
19 on or after July 1, 2009:
20 * * *
21 (iii) The initial certification shall be effective for qualifying expenditures
22 within a period twelve months prior to and twenty-four months after the date of the
23 initial certification.
24 * * *
25 D. Certification and administration.
26 (1)
27 * * *
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1 (d) When determining which productions may qualify, the office and the
2 secretary of the Department of Economic Development shall take the following
3 factors into consideration:
4 * * *
5 (iv) Conviction for a criminal offense as an incident to obtaining or
6 attempting to obtain motion picture investor tax credits.
7 (v) Any other cause the secretary determinates to be so serious and
8 compelling that denial of certification is in the best interest of the state.
9 (2)
10 * * *
11 (d)(i) Prior to any final certification of the state-certified production, the
12 motion picture production company shall submit to the office and the secretary a
13 production audit report. No later than six months after the expiration of the initial
14 certification period for the applicable state-certified production, a taxpayer shall
15 submit to the office all requests and required documentation for final certification of
16 all tax credits granted by this provision, after which time all such claims to tax
17 credits shall be deemed waived. The office and the secretary shall review the
18 production audit report and may require additional information needed to make a
19 determination as to certification. Within one hundred twenty days of the receipt of
20 the production audit report and all required supporting information, the office and
21 the secretary shall issue a tax credit certification letter indicating the amount of tax
22 credits certified for the state-certified production to the investors for all qualifying
23 expenditures verified by the office. Any expenditures for which tax credits were
24 neither denied nor certified due to insufficient information or other issues, the office
25 and secretary shall diligently work to resolve the outstanding issues in a timely
26 manner, and the office and secretary may subsequently issue a supplemental tax
27 credit certification at the time of such resolution.
28 * * *
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1 (iii) Only expenditures made during the initial certification period shall earn
2 credits.
3 * * *
4 E. Recapture of credits. If the office finds that monies for which an investor
5 received tax credits according to this Section are not invested in and expended with
6 respect to a state-certified production within twenty-four months of the date that such
7 credits are earned, then the investor's state income tax for such taxable period a
8 taxpayer has obtained a tax credit in violation of the provisions of this Chapter,
9 including but not limited to shall be increased by such amount necessary for the
10 recapture of credit provided by this Section convictions related to fraud or
11 misrepresentation, the taxpayer shall be assessed by the Department of Revenue for
12 the tax period in which the tax credits are invalidated in an amount necessary for the
13 recapture of tax credits.
14 F. Recovery of credits by Department of Revenue. (1) Credits previously
15 granted to certified and paid, claimed or obtained by a taxpayer, but later disallowed,
16 may be recovered by the secretary of the Department of Revenue through any
17 collection remedy authorized by R.S. 47:1561, plus interest and penalties provided
18 by law for the delinquent payment of taxes, and initiated within three years from
19 December thirty-first of the year in which the twenty-four-month investment period
20 specified in Subsection E of this Section ends. the latter of any of the following:
21 (a) Two years from December thirty-first in the year in which the tax credit
22 was paid.
23 (b) Two years from December thirty-first in the year in which the tax credit
24 was claimed.
25 (c) Two years from December thirty-first in the year in which the tax credit
26 was registered with the Louisiana Tax Credit Registry, as required by R.S. 47:1524.
27 (d) Three years from December thirty-first of the year in which the taxes for
28 the filing period were due.
29 * * *
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1 G. Tax credits provided for in this Section shall not be considered
2 entitlements, and the motion picture production company shall bear the burden of
3 clearly and unequivocally establishing eligibility for tax credits.
4 H. Audit reports for certification of expenditures for state-certified motion
5 picture infrastructure program tax credits shall be submitted in accordance with the
6 provisions of this Subsection.
7 (1) State-certified infrastructure project applicants may submit to the office
8 on or before December 31, 2015, all requests and required documentation for final
9 certification of all tax credits granted by this provision, after which time all such
10 claims to tax credits shall be deemed waived.
11 (2) Any request shall be accompanied by an audit performed by an
12 independent certified public accountant.
13 (3) The office, the secretary, and the division shall review the audit, and may
14 require additional information needed to make a determination as to certification.
15 (4) The office may request an additional audit report of expenditures
16 submitted by the state-certified motion picture infrastructure project applicant, with
17 the cost of the additional report paid by the applicant.
18 (5) Within three hundred and sixty five days after receipt of the audit report
19 and all required supporting information, or December 31, 2016, whichever occurs
20 first, the office, the secretary, and the division shall issue a denial letter or a tax
21 credit certification letter to the investors indicating the amount of tax credits certified
22 for the state-certified infrastructure project for all qualifying expenditures verified
23 by the office.
24 (6) Tax credits provided for in this Section shall not be considered
25 entitlements, and the state-certified motion picture infrastructure applicant shall bear
26 the burden of clearly and unequivocally establishing eligibility for tax credits.
27 (7) In the event that a request for final certification is denied, an applicant
28 may appeal the decision in accordance with program rules.
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1 (8) No motion picture infrastructure tax credits shall be certified after July
2 1, 2017.
3 Section 2. This Act shall become effective upon signature by the governor
4or, if not signed by the governor, upon expiration of the time for bills to become law without
5signature by the governor, as provided by Article III, Section 18 of the Constitution of
6Louisiana. If vetoed by the governor and subsequently approved by the legislature, this Act
7shall become effective on the day following such approval.
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 748 Engrossed 2015 Regular Session Stokes
Abstract: Numerous procedural changes to the motion picture investor tax credit program,
also includes addition of eligibility for online productions, and requirements specific
to final certifications of project expenditures for motion picture infrastructure
investor tax credits.
Present law authorizes a tax credit against state income tax based on motion picture
production expenditures for state-certified productions. The tax credit is calculated as a
percentage of the total base investment dollars certified per project.
Present law authorizes an income tax credit equal to 30% of production expenditures for all
state-certified productions approved after July 1, 2009. Also provides an additional tax
credit equal to 5% of the base investment expended on payroll for La. residents employed
in connection with all state-certified productions.
Proposed law, for productions granted initial certification on or after Jan. 1, 2016, makes
several changes regarding the procedures and time periods involved with initial certification
of expenditures.
Proposed law changes the present law definition for motion picture to include eligibility for
motion pictures developed for viewing online, and adds a definition for "taxpayer".
Present law provides that the tax credit is earned when production expenditures are
"certified" by the office of entertainment industry development within the Dept. of
Economic Development (DED). Expenditures may be certified no more than twice during
the duration of a state-certified production, unless the motion picture production company
agrees to reimburse DED for the cost of additional certifications.
Proposed law changes present law by reducing the number of times expenditures can be
certified and changes the timing of certifications for expenditures from twice during the
production to once after the project is completed.
Proposed law specifies that the initial certification shall be effective for qualifying
expenditures made within 12 months before and 24 months after the date of initial
certification.
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Proposed law adds a requirement that no later than six months after the expiration of the
initial certification period for the applicable state-certified production, a taxpayer is required
to submit to the office all requests and required documentation for final certification of all
tax credits or the claims to such tax credits shall be deemed waived.
Proposed law changes the time period within which the Dept. of Revenue may recapture
credits which were granted and then disallowed, providing for specific time periods based
upon whether the credit was paid, claimed, or registered with the La. Tax Credit Registry.
Prior law sunsets the motion picture infrastructure investor tax credit on Dec. 31, 2008, by
repealing the authority to issue credits for any state-certified project for which less than 50%
of the base investment provided for in the initial certification had been expended by Dec. 31,
2008.
Proposed law adds requirements regarding submission and consideration of audit reports for
final certification of state-certified expenditures for the motion picture infrastructure
investor tax credits.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Amends R.S. 47:6007(B)(5), (10)-(16), (C)(1)(intro. para.), (a)(iii) and (b)(iii),
(D)(2)(d)(i), (E), and (F)(1); Adds R.S. 47:6007(B)(17), (C)(1)(c)(iii) , (D)(1)(d)(iv) and (v)
and (2)(d)(iii), (G), and (H))
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Ways and Means to the
original bill:
1. Add a starting date for provisions of proposed law with regard to the motion
picture investor tax credit.
2. Add a definition for "taxpayer" for purposes of the motion picture investor tax
credit.
3. Add provisions governing the time period authorized for the recovery of
disallowed tax credits by the Dept. of Revenue.
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