INVESTOR TAX CREDIT

The new law grants a tax credit against state income tax for taxpayers domiciled and headquartered in Louisiana.

The objective of this tax credit is to attract private investment for the production of nationally distributed feature length films, videos, television programs, or commercials made in Louisiana, in whole or in part for theatrical or television viewing or as a television pilot.

The investor shall earn the tax credit at the time of such investment.

If the total base investment is greater than $300,000 and less or equal to $8 million dollars, each taxpayer shall be allowed a tax credit of 10% of the actual investment made by that taxpayer.

If the total base investment is greater than $8 million dollars, each taxpayer shall be allowed a tax credit of 15% of the investment made by that taxpayer.

Procedures for application of the credit are as follows:

(1) Entities taxed as corporations shall claim their credit on their corporation income tax return.

(2) Individuals shall claim their credit on their individual income tax return.

(3) Entities not taxed as corporations shall claim the credit on the returns of the partners or members as follows:

(a) Corporate partners or members shall claim their share of the credit on their corporation income or corporation franchise tax returns.

(b) Individual partners or members shall claim their share on their individual income tax returns.

(c) Partners or members that are estates or trusts shall claim their share of the credit on their fiduciary income tax returns.

In the event that the entire credit cannot be used in the year earned, any remaining credit may be carried forward and applied against income tax liabilities for the subsequent 10 years.

Purpose
The purpose of this tax credit is to encourage development in Louisiana of a strong capital base for motion pictures, in order to achieve a more independent and economically sustainable film and video industry. The purpose serves to attract private investment for the production of motion pictures and develop a Louisiana indigenous entertainment industry utilizing tax credits that encourage investments in Louisiana produced films.

Eligibility

Ten Percent (10%) of Actual Investment:
The base investment in a state certified production must be greater than three hundred thousand dollars and less than or equal to eight million dollars.

Fifteen Percent (15%) of Actual Investment:
The base investment in a state certified production must be greater than eight million dollars.

Application for State Certification
The Commission provides a standard form which applicants will use to apply for state certification.

The application contains detailed descriptions of the following:

1. Name of the production company;

2. Phone number of the production company;

3. Name and phone number of a company contact person;

4. List the first pre-production date through last production date in Louisiana;

5. Louisiana production office address;

6. Louisiana production office phone number;

7. Total budget of the film;

8. Total expenditures in Louisiana;

9. Total percentage of film being shot in Louisiana;

10. The level of employment of Louisiana cast and crew;

11. Completion bond;

12. Script (including a synopsis); and principal creative elements list (principal cast, producer, and director); and

13. Distribution plan, including

o Domestic distribution

o International distribution

o Sales Estimates

Submission and Review Procedure

· Applicants must submit their completed application to the director of the Governor's Office of Film & TV Development.

· Submitted applications will be reviewed and evaluated by the director.

· Upon determination that an application meets the criteria for this program, the director will send a certification letter to the investors and the secretary of the Department of Revenue.

Time credit earned
The tax credit is earned at the time the investment is made in a state-certified production.

Use of the credit

· Corporation must claim on their corporation income tax return.

· Corporate partners or members on their corporation income or corporation franchise tax returns.

· Individual partners or limited liability members must claim their share of the credit on their individual tax returns.

· Partners or limited liability members that are estates must claim their share of the credit on their fiduciary income tax returns.

Unused credit
In the event the entire credit cannot be used in the year earned, then any remaining credit may be carried forward and applied against income tax liabilities for the subsequent ten years.

Audits
A motion picture company applying for the investor tax credit will be required to reimburse the Department of Revenue for any audits required in relation to granting the investor tax credit.

Reporting Requirements

· A report evidencing the total base investment made in Louisiana.

· A completed expenditure/questionnaire report (form to be provided by the Commission).

· A final cast and crew list for the project.

Recapture of credits
If an investor received credits for funds not actually invested in and expended in a state-certified production within twenty-four (24) months of date the credits were earned ("twenty-four month investment period"), then the investor's state income tax for such taxable period will be increased by the amount necessary for the recapture of those previously granted credits.

Procedure for Recovery
The secretary of Revenue may recover investor credits previously granted to an applicant, but later disallowed, through any collection remedy authorized by state law.