GREEN SHEET REDIGEST
HB 562 2023 Regular Session Schexnayder
TAX CREDITS: Provides relative to the Motion Picture Production Tax Credit.
DIGEST
Present law authorizes the following tax credits for state-certified productions:
(1)A 25% tax credit if the base investment is in excess of $300,000 or if the production
is a La. screenplay production.
(2)An additional 5% base investment credit for projects filmed outside the New Orleans
Metro Zone, but not including St. John the Baptist Parish.
(3)An additional 10% base investment credit for certain expenditures equal to or greater
than $50,000 but less than $5 million for projects meeting certain La. screenplay
criteria.
(4)A 15% credit for La. resident payroll expenditures.
(5)A 5% credit for certain La.-based visual effects expenditures meeting certain
requirements.
Proposed law retains present law.
Present law defines a "La. promotional graphic" as a graphical brand or logo for promotion
of the state that has been approved by the office of entertainment industry development in
the Dept. of Economic Development (DED), hereinafter "office", and requires productions
to acknowledge the financial assistance of the state, either through the inclusion of a La.
promotional graphic or an alternative marketing option approved by the office.
Proposed law removes the alternative marketing option for productions submitting an
application on or after July 1, 2023.
Proposed law expands the definition of "La. promotional graphic" to include an electronic
press kit or a customized video for use by the office or an alternative asset as determined by
the office and either of the following:
(1)Up to a five-second long static or animated graphic that promotes La. in the end
credits before the below-the-line crew crawl for the life of the production.
(2)Up to a five-second long static or animated embedded graphic that promotes La.
during each broadcast worldwide, in the end credits before the below-the-line crew
crawl for the life of the production.
Proposed law provides that commercials, music videos, or other state-certified productions
that are prohibited by federal law or contractual requirements from utilizing the promotional
graphic are allowed to use an alternative marketing option approved by the office.
Present law provides for a cap of $150M in any fiscal year on tax credits that may be granted
in a final certification letter by DED for state-certified productions and qualified
entertainment companies (QEC) submitted on or after July 1, 2017. 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.
Present law reserves 20% of the annual program cap as follows: 5% for qualified
entertainment companies, 5% for La. screenplay productions, and 10% for independent film
productions.
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Prepared by Danielle Clapinski. Proposed law retains present law with respect to the $150M DED program issuance cap but
repeals the reservation of tax credits in present law for state-certified productions and QEC
applications submitted on or after July 1, 2023.
Present law provides for establishment of the La. Entertainment Development Dedicated
Fund Account for deposit of fees collected by the Dept. of Revenue (DOR) pursuant to
notifications of transfer of tax credits. Present law requires 25% of the monies in the account
to be appropriated to DOR for administrative purposes and 75% of the monies to be
appropriated to the office for education development initiatives, matching grants for La.
filmmakers, a loan guarantee program, and a deal closing fund.
Proposed law retains present law but changes the use of the monies in the account
appropriated to the office by eliminating the loan guarantee program and a deal closing fund
and including La. workforce development programs, and other motion picture and television
related programs as determined by rule.
Proposed law prohibits credits from being earned by, certified, issued to, transferred by, or
used to reduce Louisiana tax liability by a motion picture production company, irrevocable
designee, taxpayer or claimant from earning a credit if there exists a delinquent federal, state,
or local tax obligation. Requires the motion picture production company, irrevocable
designee, taxpayer, or claimant to certify to this requirement before any credit may be
certified, transferred, or sold.
Present law requires DED to engage an independent certified public accountant to prepare
a production expenditure verification report on a tax credit applicant's cost report of
expenditures or claims. Present law further requires the applicant to make all records
available to the CPA.
Proposed law requires the records to include a listing of all La. expenditures detailing the
date of the expenditure, the vendor's address including the zip code, and the amount of the
expenditure for applications received on or after July 1, 2023.
Present law requires DED to submit an initial certification or written denial of a project as
a state-certified production to investors and the secretary of DOR within 60 days of receipt
of required information. Further requires the initial certification to include a primary
allocation of tax credits by year.
Proposed law retains present law with respect to submission of an initial certification or
written denial but repeals present law provisions with respect to inclusion of a primary
allocation of tax credits by year in an initial certification.
Present law prohibits motion picture production tax credits from being allowed for
applications received on or after July 1, 2025.
Proposed law extends the sunset of this tax credit from July 1, 2025, to July 1, 2030.
Proposed law requires DED to develop a new La. promotional graphic and submit it to the
Joint Legislative Committee on the Budget for approval no later than Nov. 1, 2023.
(Amends R.S. 47:6007(B)(11), (C)(1)(a)(iv) and (h)(iii)(bb), (D)(2)(c)(i) and (d)(i), (I), and
(J)(1); Adds R.S. 47:6007(C)(8) and (K))
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Ways and Means to the
original bill:
1. Expand the definition of a "Louisiana promotional graphic".
2. Remove provision that would have eliminated the alternative marketing option
for productions submitting an application on or after July 1, 2023.
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Prepared by Danielle Clapinski. 3. Remove provision that would have eliminated the $150M Dept. of Economic
Development program issuance cap.
4. Add provision that specifies that the 20% allotment of the $150M Dept. of
Economic Development program issuance cap in present law reserved for
qualified entertainment companies (QEC), La. screenplay productions, and
independent film productions shall not apply to state-certified productions and
QEC applications submitted on or after July 1, 2023.
5. Delete the repeal of the sunset provision of this tax credit in favor of extending
the sunset from July 1, 2025, to July 1, 2035.
The House Floor Amendments to the engrossed bill:
1. Restore the provision eliminating the alternative marketing option for
productions submitting an application on or after July 1, 2023.
2. Reduce the percentage of the face value of the credit that a production company
can transfer to the Dept. of Revenue for payment by 7.5% each year over the next
12 years.
3. Prohibit a bank or other lender from being named as an irrevocable designee for
the tax credit beginning July 1, 2023.
4. Prohibit a motion picture production company from receiving a credit if the
company is delinquent on any federal, state, or local taxes or has a lien against
any property in La.
5. Require the Dept. of Economic Development to develop a new promotional
graphic and submit it to the Joint Legislative Committee on the Budget for
approval no later than Nov. 1, 2023.
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Revenue and Fiscal Affairs
to the reengrossed bill
1. Allows commercials, music videos, or other state-certified productions to use an
alternative marketing option approved by the office if they are prohibited by
federal law or contractual requirements from using the promotional graphic.
2. Removes the reduction of the buyback by 7.5% each year through June 30, 2034.
3. Requires motion picture production companies, irrevocable designees, taxpayers,
or claimants to certify that there exists no delinquent tax liability before credits
can be transferred or sold.
4. Changes the sunset date from July 1, 2035 to July 1, 2030.
5. Makes technical changes.
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Prepared by Danielle Clapinski.