SLS 17RS-167 ORIGINAL
2017 Regular Session
SENATE BILL NO. 40
BY SENATOR LUNEAU
TAX/TAXATION. Sunsets Motion Picture Production Tax Credit. (gov sig)
1 AN ACT
2 To amend and reenact the introductory paragraph of R.S. 47:6007(C)(1), R.S.
3 47:6007(C)(1)(c), (d)(i), and (f), relative to the Motion Picture Investor Credit; to
4 sunset the credit; to provide for a final certification date for eligible expenses; to
5 provide for an effective date; and to provide for related matters.
6 Be it enacted by the Legislature of Louisiana:
7 Section 1. The introductory paragraph of R.S. 47:6007(C)(1), R.S. 47:6007(C)(1)(c),
8 (d)(i), and (f) are hereby amended and reenacted to read as follows:
9 ยง6007. Motion picture production tax credit
10 * * *
11 C. Production tax credit; specific productions and projects.
12 (1) There is hereby authorized a tax credit against state income tax for
13 Louisiana taxpayers for expenditures made before January 1, 2018, related to
14 state-certified productions. The tax credit shall be earned by a motion picture
15 production company at the time expenditures are certified by the office and the
16 secretary for a motion picture production company in a state-certified production,
17 provided that the certification is completed before July 1, 2018. However, credits
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1 cannot be applied against a tax or transferred until the expenditures are certified by
2 the office and the secretary. For state-certified productions, expenditures shall be
3 certified no more than once per production, after project completion. However, if at
4 the time of application for initial certification, the office is notified that post-
5 production activities will take place in Louisiana, a supplemental request for
6 certification of expenditures directly related to such post-production activity may be
7 submitted for consideration by the office. The cost of any verification or audit of
8 such expenditures shall be borne by the motion picture production company. The tax
9 credit shall be calculated as a percentage of the total base investment dollars certified
10 per project.
11 * * *
12 (c) For state-certified productions approved by the office and the secretary
13 on or after July 1, 2009:
14 (i) If the total base investment made before January 1, 2018, is greater than
15 three hundred thousand dollars, each investor shall be allowed a tax credit of thirty
16 percent of the base investment made by that investor. However, if a state-certified
17 production does not include a Louisiana promotional graphic or an alternative
18 marketing opportunity which has been approved by the department for that specific
19 production, the tax credit shall be twenty-five percent of the base investment made
20 by the investor.
21 (ii) If the total base investment made before January 1, 2018, is greater than
22 fifty thousand dollars, but less than three hundred thousand dollars, for each state
23 certified production there shall be allowed a tax credit of thirty percent of the total
24 base investment made by that investor. However, each applicant shall accept as a
25 condition for earning this tax credit, that no less than ninety percent of the total
26 amount of the applicant's expenditures for above the line services shall be expended
27 on residents of Louisiana and that ninety percent or more of the total number of jobs
28 in the production shall be jobs in which the applicant will employ residents of
29 Louisiana. Failure to comply with these requirements for which certification of the
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1 tax credits is granted, shall void the certification and no tax credits shall be certified
2 by the office or the secretary or earned by the applicant.
3 (iii) If the total base investment made before January 1, 2018, is greater
4 than three hundred thousand dollars and the state certified production is based on a
5 screenplay, the copyright of which or the right of use of the copyright of which, is
6 owned or optioned to own for a minimum of twelve months prior to production by
7 a Louisiana resident company or a Louisiana company with its principal place of
8 business in the state which employs a minimum of three full-time Louisiana
9 residents for minimum of twelve months prior to production, there shall be allowed
10 a tax credit of an additional fifteen percent of the base investment of the state-
11 certified production. If the office and the secretary determine that an expenditure is
12 a related party transaction, that expenditure shall not qualify for the additional fifteen
13 percent tax credit. The tax credit authorized in this Item shall be in addition to the tax
14 credit authorized in Item (i) of this Subparagraph. Prior to the office certifying any
15 credits pursuant to the provisions of this Item, the secretary shall promulgate rules
16 and regulations pursuant to the Administrative Procedure Act, subject to oversight
17 by the House Ways and Means and the Senate Revenue and Fiscal Affairs
18 Committees. The rules and regulations shall set forth criteria a Louisiana resident
19 company with its principal place of business in this state shall meet in order to
20 qualify for the additional credit. The secretary shall commence the promulgation of
21 rules and regulations no later than October 1, 2015.
22 (iv) To the extent that base investment made before January 1, 2018, is
23 expended on payroll for Louisiana residents employed in connection with a state-
24 certified production, each investor shall be allowed an additional tax credit of ten
25 percent of such payroll.
26 (v) To the extent that the base investment made before January 1, 2018, is
27 expended on music, the sound recording copyright of which, or musical copyright
28 of which, is owned in whole or in part at no less than twenty-five percent by a
29 resident of Louisiana or a Louisiana company headquartered in the state with a
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1 majority ownership of residents of Louisiana, there shall be allowed an additional tax
2 credit of fifteen percent of the base investment.
3 (vi) The initial certification shall be effective for qualifying expenditures
4 made within a period twelve months prior to and twenty-four months after the date
5 of the initial certification, provided that any expenditures made after January 1,
6 2018, are not qualifying expenditures that are eligible for the credit pursuant
7 to this Section.
8 (d)(i) For state-certified productions approved on or after July 1, 2015, and
9 on or before June 30, 2018, the maximum amount of credits that may be certified for
10 an single state-certified production shall not exceed thirty million dollars. The credit
11 for these productions may be structured over two or more tax years as provided for
12 in the initial certification letter, provided that any expenditures made after
13 January 1, 2018, are not qualifying expenditures that are eligible for the credit
14 pursuant to this Section.
15 * * *
16 (f) Motion picture investor tax credits shall be certified only upon the receipt
17 and approval by the office of a production expenditure verification report submitted
18 by a qualified accountant in accordance with the provisions of Subparagraph
19 (D)(2)(c) of this Section, provided that no credit shall be earned for any
20 certification that is not completed by the office before July 1, 2018.
21 * * *
22 Section 2. This Act shall become effective upon signature by the governor or, if not
23 signed by the governor, upon expiration of the time for bills to become law without signature
24 by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If
25 vetoed by the governor and subsequently approved by the legislature, this Act shall become
26 effective on the day following such approval.
27 Section 3. Any Motion Picture Investor Credit earned for production expenditures
28 made before January 1, 2018, shall continue to be applied and carried forward under the
29 provisions of R.S. 47:6007 in effect immediately prior to the effective date of this Act.
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The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Leonore Heavey.
DIGEST
SB 40 Original 2017 Regular Session Luneau
Present law authorizes an income tax credit for production expenditures by a motion picture
production company on a state-certified production.
Proposed law provides that no credit is authorized for any expenditures made on or after
January 1, 2018.
Present law provides that motion picture production tax credits are earned when eligible
expenses are certified by the office of entertainment industry development.
Proposed law requires that all eligible expenses be certified by the office of entertainment
industry development before July 1, 2018.
Effective upon signature of the governor or lapse of time for gubernatorial action.
(Amends R.S. 47:6007(C)(1)(intro. para.), (c), (d)(i), and (f))
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