Louisiana House Bill HB646

Louisiana 2017 Regular Session

• Introduced: 4/19/17
• Refer: 4/20/17
• Report Pass: 5/15/17
• Engrossed: 5/24/17
• Refer: 5/30/17
• Report Pass: 6/1/17
• Enrolled: 6/8/17
• Chaptered: 6/16/17
• Passed: 6/16/17

Caption

Provides for changes to the sound recording investor tax credit and provides for the amount of the expenditure verification report fee and deposit (EN DECREASE GF RV See Note)

Impact

The bill has been structured to provide multiple tiers of tax credits based on the scale of payroll associated with new jobs created within Qualified Music Companies (QMCs). Notably, the tax credits can be significant, with provisions allowing for 10% to 15% credits depending on the salary levels of the jobs created. This framework is meant to engage both small and larger operators in the music sector. The potential economic benefits include the provision of new jobs, bolstering local economic activity, and developing infrastructure critical to sound recording projects. However, the total amount of credits is capped annually, ensuring that not more than $2.16 million in credits is allocated each year, and that half of this amount is reserved for QMCs.

Summary

House Bill 646 seeks to amend the existing sound recording investor tax credit in Louisiana. Its goal is to promote the growth of the local music and sound recording industry by incentivizing private investment in state-certified sound recording productions and infrastructure. This initiative is designed to create a more self-sustaining music industry in Louisiana, aiding in job creation and economic development in the creative sector. The bill includes specific mechanisms for ensuring that tax credits are awarded based on verified expenditures within the state, which is crucial for attracting new investments in the industry.

Sentiment

The sentiment regarding HB 646 appears to be generally positive among stakeholders in the music industry, who view the tax incentives as necessary support for a flourishing local economy. The legislation garnered no opposition during its passage, receiving unanimous approval in a recent house vote. Proponents argue it is an essential step to help local musicians and recording businesses compete with larger markets, while critics, if any, may express concerns about the potential for misuse or the complexity of the credit system. Overall, discussions have favored the bill's enactment as a means to strengthen Louisiana's cultural economy.

Contention

One point of contention lies in the administrative processes established for the tax credits, specifically in how investments are verified and certified. The bill mandates oversight by the Louisiana Department of Economic Development, which requires expenditure verification reports contributed by certified public accountants for tax credit certification. Some may argue that the costs associated with these compliance requirements could deter smaller entities from applying for the credits. Furthermore, the bill entails a review process every two years to assess its effectiveness, inviting ongoing scrutiny from legislative committees, which could be pivotal in shaping future iterations of the law.