HLS 15RS-396 REENGROSSED
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), and (4)(e), (D)(2)(d)(i), (E), and (F)(1), and to enact
4 R.S. 47:6007(17) and (18), (C)(1)(c)(iii), (D)(1)(d)(iv) and (v) and (2)(d)(iii), (F)(4),
5 G, and H, relative to income tax credits; to provide with respect to the motion picture
6 investor tax credit; to provide for definitions; to provide eligibility for certain types
7 of productions; to provide requirements for the completion of projects and
8 certification of expenditures; to authorize assignment of credits to a lender under
9 certain 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), and (4)(e), (D)(2)(d)(i), (E), and (F)(1) are hereby amended and
15reenacted, and R.S. 47:6007(B)(17) and (18), (C)(1)(c)(iii) , (D)(1)(d)(iv) and (v) and
16(2)(d)(iii), (F)(4), G, and H are hereby enacted, to read as follows:
17 ยง6007. Motion picture investor tax credit
18 * * *
19 B. Definitions. For the purposes of this Section:
20 * * *
Page 1 of 10
CODING: Words in struck through type are deletions from existing law; words underscored
are additions. HLS 15RS-396 REENGROSSED
HB NO. 748
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 may be further defined by the office through the
6 promulgation of rules. The term "motion picture" shall not include the production
7 of television coverage of news and athletic events.
8 * * *
9 (10) "Production expenditures" means preproduction, production, and
10 postproduction expenditures in this state directly relating to a state-certified
11 production, including without limitation the following: set construction and
12 operation; wardrobes, makeup, accessories, and related services; costs associated
13 with photography and sound synchronization, lighting, and related services and
14 materials; editing and related services; rental of facilities and equipment; leasing of
15 vehicles; costs of food and lodging; digital or tape editing, film processing, transfer
16 of film to tape or digital format, sound mixing, special and visual effects; and
17 payroll. This For all state-certified productions approved on or after January 1, 2004,
18 this term shall not include expenditures for marketing and distribution, non-
19 production related overhead, amounts reimbursed by the state or any other
20 governmental entity, costs related to the transfer of tax credits, amounts that are paid
21 to persons or entities as a result of their participation in profits from the exploitation
22 of the production, the application fee, or state, or local taxes, or any expenditures
23 occurring outside of Louisiana.
24 (11) "Project completion" means completion of principal photography, or as
25 otherwise approved in writing by the office.
26 (11)(12) "Qualified accountant" means an independent certified public
27 accountant authorized to practice in this state who has sufficient knowledge of
28 accounting principles and practices generally recognized in the film and television
29 industry.
Page 2 of 10
CODING: Words in struck through type are deletions from existing law; words underscored
are additions. HLS 15RS-396 REENGROSSED
HB NO. 748
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 in a production, a motion picture
16 production company applicant, individual with an ownership interest in a motion
17 picture production 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
Page 3 of 10
CODING: Words in struck through type are deletions from existing law; words underscored
are additions. HLS 15RS-396 REENGROSSED
HB NO. 748
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 made within a period twelve months prior to and twenty-four months after the date
23 of the initial certification.
24 * * *
25 (4) Transferability of the credit. Any motion picture tax credits not
26 previously claimed by any taxpayer against its income tax may be transferred or sold
27 to another Louisiana taxpayer or to the office, subject to the following conditions:(3)
28 Application of the credit.
29 * * *
Page 4 of 10
CODING: Words in struck through type are deletions from existing law; words underscored
are additions. HLS 15RS-396 REENGROSSED
HB NO. 748
1 (e) To the extent that the transferor did not have rights to claim or use the
2 credit at the time of the transfer, the Department of Revenue shall either disallow the
3 credit claimed by the transferee or recapture the credit from the transferee through
4 any collection method authorized by R.S. 47:1561. The transferee's recourse is
5 against the transferor have recourse against the transferor.
6 D. Certification and administration.
7 (1)
8 * * *
9 (d) When determining which productions may qualify, the office and the
10 secretary of the Department of Economic Development shall take the following
11 factors into consideration:
12 * * *
13 (iv) Conviction for a criminal offense as an incident to obtaining or
14 attempting to obtain motion picture investor tax credits.
15 (v) Any other compelling reason or circumstance for which the secretary
16 determines that denial of certification is in the best interest of the state.
17 (2)
18 * * *
19 (d)(i) Prior to any final certification of the state-certified production, the
20 motion picture production company shall submit to the office and the secretary a
21 production audit report. No later than six months after the expiration of the initial
22 certification period for the applicable state-certified production, a taxpayer shall
23 submit to the office all requests and required documentation for final certification of
24 all tax credits granted by this Section, after which time all such claims to tax credits
25 shall be deemed waived. The office and the secretary shall review the production
26 audit report and may require additional information needed to make a determination
27 as to certification. Within one hundred twenty days of the receipt of the production
28 audit report and all required supporting information, the office and the secretary shall
29 issue a tax credit certification letter indicating the amount of tax credits certified for
Page 5 of 10
CODING: Words in struck through type are deletions from existing law; words underscored
are additions. HLS 15RS-396 REENGROSSED
HB NO. 748
1 the state-certified production to the investors for all qualifying expenditures verified
2 by the office. Any expenditures for which tax credits were neither denied nor
3 certified due to insufficient information or other issues, the office and secretary shall
4 diligently work to resolve the outstanding issues in a timely manner, and the office
5 and secretary may subsequently issue a supplemental tax credit certification at the
6 time of such resolution.
7 * * *
8 (iii) Only expenditures made during the initial certification period shall earn
9 credits.
10 * * *
11 E. Recapture of credits. If the office finds that monies for which an investor
12 received tax credits according to this Section are not invested in and expended with
13 respect to a state-certified production within twenty-four months of the date that such
14 credits are earned, then the investor's state income tax for such taxable period a
15 taxpayer has obtained a tax credit in violation of the provisions of this Chapter,
16 including but not limited to shall be increased by such amount necessary for the
17 recapture of credit provided by this Section convictions related to fraud or
18 misrepresentation, the taxpayer shall be assessed by the Department of Revenue for
19 the tax period in which the tax credits are invalidated in an amount necessary for the
20 recapture of tax credits.
21 F. Recovery of credits by Department of Revenue. (1) Credits Except as
22 provided in Paragraph (4) of this Subsection, credits previously granted to certified
23 and paid, claimed, or obtained by a taxpayer, but later disallowed, may be recovered
24 by the secretary of the Department of Revenue through any collection remedy
25 authorized by R.S. 47:1561, plus interest and penalties provided by law for the
26 delinquent payment of taxes, and initiated within three years from December thirty-
27 first of the year in which the twenty-four-month investment period specified in
28 Subsection E of this Section ends. by the latter of any of the following:
Page 6 of 10
CODING: Words in struck through type are deletions from existing law; words underscored
are additions. HLS 15RS-396 REENGROSSED
HB NO. 748
1 (a) Two years from December thirty-first in the year in which the tax credit
2 was paid.
3 (b) Two years from December thirty-first in the year in which the tax credit
4 was claimed.
5 (c) Two years from December thirty-first in the year in which the tax credit
6 was registered with the Louisiana Tax Credit Registry, as required by R.S. 47:1524.
7 (d) Three years from December thirty-first of the year in which the taxes for
8 the filing period were due.
9 * * *
10 (4) No disallowance or recapture of a tax credit shall be allowed for a tax
11 credit claimed by a good faith purchaser who acquired the credit through a transfer
12 authorized pursuant to this Section.
13 G. Tax credits provided for in this Section shall not be considered
14 entitlements, and the taxpayer shall bear the burden of establishing eligibility for tax
15 credits by a preponderance of the evidence.
16 H. Audit reports for certification of expenditures for state-certified motion
17 picture infrastructure program tax credits shall be submitted in accordance with the
18 provisions of this Subsection.
19 (1) State-certified infrastructure project applicants may submit to the office
20 on or before December 31, 2015, all requests and required documentation for final
21 certification of all tax credits granted by this provision, after which time all such
22 claims to tax credits shall be deemed waived.
23 (2) Any request shall be accompanied by an audit performed by an
24 independent certified public accountant.
25 (3) The office, the secretary, and the division shall review the audit, and may
26 require additional information needed to make a determination as to certification.
27 (4) The office may request an additional audit report of expenditures
28 submitted by the state-certified motion picture infrastructure project applicant, with
29 the cost of the additional report paid by the applicant.
Page 7 of 10
CODING: Words in struck through type are deletions from existing law; words underscored
are additions. HLS 15RS-396 REENGROSSED
HB NO. 748
1 (5) Within three hundred and sixty five days after receipt of the audit report
2 and all required supporting information, or December 31, 2016, whichever occurs
3 first, the office, the secretary, and the division shall issue a denial letter or a tax
4 credit certification letter to the investors indicating the amount of tax credits certified
5 for the state-certified infrastructure project for all qualifying expenditures verified
6 by the office.
7 (6) Tax credits provided for in this Section shall not be considered
8 entitlements, and the state-certified motion picture infrastructure applicant shall bear
9 the burden of establishing eligibility for tax credits by a preponderance of the
10 evidence.
11 (7) In the event that a request for final certification is denied, an applicant
12 may appeal the decision in accordance with program rules.
13 (8) No motion picture infrastructure tax credits shall be certified after July
14 1, 2017.
15 Section 2. This Act shall become effective upon signature by the governor
16or, if not signed by the governor, upon expiration of the time for bills to become law without
17signature by the governor, as provided by Article III, Section 18 of the Constitution of
18Louisiana. If vetoed by the governor and subsequently approved by the legislature, this Act
19shall 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 Reengrossed 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
Page 8 of 10
CODING: Words in struck through type are deletions from existing law; words underscored
are additions. HLS 15RS-396 REENGROSSED
HB NO. 748
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.
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.
Present law with respect to the transfer of tax credits from one owner to another, provides
that in the event the transferor did not have rights or claim to use the credit at the time of
transfer, the Dept. of Revenue shall either disallow or recapture the credit from the
transferee. The transferee's recourse is against the transferor.
Proposed law changes present law by providing that in such case the Dept. of Revenue shall
have recourse against the transferror.
Present law authorizes the recapture of the value of any tax credits if DED finds that the
credits were obtained through fraud or misrepresentation. The Dept. of Revenue is
authorized to assess the taxpayer in an amount equal to the value of the tax credits. Present
law further provides for the collection of amounts associated with credits which have been
disallowed by DED.
Proposed law prohibits the disallowance or recapture of a tax credit that is claimed by a good
faith purchaser who acquired the credit through a transfer authorized by present law.
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.
Page 9 of 10
CODING: Words in struck through type are deletions from existing law; words underscored
are additions. HLS 15RS-396 REENGROSSED
HB NO. 748
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), and (4)(e),
(D)(2)(d)(i), (E), and (F)(1); Adds R.S. 47:6007(B)(17) and (18), (C)(1)(c)(iii) , (D)(1)(d)(iv)
and (v) and (2)(d)(iii), (F)(4) (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.
The House Floor Amendments to the engrossed bill:
1. Change provisions governing transfers of tax credits when a credit is sold by a
transferor with no right to claim or use the credit.
2. Add prohibition on the disallowance or recapture of a tax credit claimed by a
good faith purchaser.
Page 10 of 10
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.