VOODOO FILM PRODUCTION: FILM-MAKING LOUISIANA STYLE · 2013-10-17 · VOODOO FILM PRODUCTION:...
Transcript of VOODOO FILM PRODUCTION: FILM-MAKING LOUISIANA STYLE · 2013-10-17 · VOODOO FILM PRODUCTION:...
VOODOO FILM PRODUCTION: FILM-MAKING LOUISIANA STYLE
MICHAEL ARATA, New Orleans, LA Voodoo Pictures, LLC
Seven Arts Pictures Louisiana, LLC
PHYLLIS D. SIMS, Baton Rouge, LA Of Counsel KeanMiller
State Bar of Texas 18TH ANNUAL
ENTERTAINMENT LAW INSTITUTE October 2-3, 2008
Austin
CHAPTER 7
Michael Arata
Biography
Michael Arata is a lawyer, actor and film producer. He began his acting career at age four and has appeared on stage, in feature films and television programs for the past thirty-eight years.
As an actor, he has worked with Academy Award winners Oliver Stone, Gene Hackman, Kevin Costner, Tommy Lee Jones, Jamie Foxx, Tatum O'Neil, Kim Hunter, Billy Bob Thornton, Denzel Washington, Ellen Burstyn and Sissy Spacek, and has appeared on stage with Kenneth Branagh, Ben Kingsley, Rosemary Harris and Alan Rickman. In 2003, he appeared with Alec Baldwin and Elizabeth Ashley in Tennessee Williams' classic The Night of the Iguana, and in 1997, American Theatre Magazine hailed Mr. Arata's performance of Stanley Kowalski in Tennessee Williams' classic A Streetcar Named Desire as "unhinged and electrifying", and called the performance "a Stanley for our times".
Prior to Hurricane Katrina in 2005, Mr. Arata produced “Shakespeare in City Park” in New Orleans, the City's only outdoor theatre, as well as several productions in conjunction with the Tennessee Williams Literary Festival. In 1998, he formed Art A La Carte, Louisiana's only theatre for the disabled, and one of the nation's only fully accessible creative arts programs.
In 1989, Michael Arata began producing films, starting with his first short film Looking For Someone. The film won the Grand Jury Award for Best Narrative Short at the Utah Short Film Festival. Since then, Mr. Arata has produced documentaries (The People's Story on the devastation caused by Hurricane Mitch in Central America, and the winner of the Houston International Film Festival and Telluride Independent Film Festival; and Shalom Y'all, a documentary focusing on southern Jewish culture, winner of The Sidewalk Moving Pictures Festival), and several feature films, including MGM’s DEAL starring Burt Reynolds, The Shooting Gallery, starring Freddie Prinze Jr. and Ving Rhames, Home Front starring Academy Award winner Tatum O'Neal, and New Orleans Mon Amour, starring Christopher Eccleston. In 2006, following the devastation in New Orleans by Hurricane Katrina, Mr. Arata produced the first independent feature film (DEAL) in the city, followed quickly by the low-budget indie New Orleans Mon Amour (written and directed by Michael Almereyda, and which premiered at the 2008 SXSW Film Festival). In the past 18 months, he has produced the following feature films: American Summer (starring Matt Lillard and Tom Arnold) for MGM, Autopsy (starring Robert Patrick) for Lionsgate/AfterDark (January 2009 release), The Legend of Awesome Maximus for National Lampoon, Demoted (currently being filmed in Michigan), and Night of the Demons (currently being filmed in Louisiana).
Michael Arata lives and works in New Orleans, Louisiana and is a partner in Voodoo Production Services, LLC and Voodoo Pictures, LLC, New Orleans based film production and finance companies. He is also an owner in Seven Arts Pictures Louisiana, LLC, a full service post-production facility in New Orleans, Louisiana.
He holds a law degree from Tulane University, and regularly conducts seminars on entertainment law at Loyola University and Tulane University in New Orleans, and continuing legal education seminars for practicing lawyers.
PHYLLIS D. SIMS Phyllis D. Sims, is Of Counsel to the Baton Rouge, Louisiana office of the Kean Miller law firm. She joined the firm in 2000 and practices in the governmental, legislative, administrative and tax practice group. Phyllis earned her B.B.A., cum laude, from Southern Arkansas University in 1991, became a Certified Public Accountant in 1992, completed the LSU Internal Audit School Program in 1995, and earned her J.D. from the LSU Law Center in 2000. Phyllis practices primarily in the state and local tax area with an emphasis on Louisiana state and local tax planning, incentive programs, tax litigation, and legislative matters. She represents local, state, national, and international clients in Louisiana taxation matters, and represents some of Louisiana’s most prominent businesses in governmental and legislative matters. Phyllis has been actively involved with the legislative passage and progression of state tax credits for the Louisiana Motion Picture Incentive Program and the Digital Interactive Media Program, and she provides representation as legislative counsel and incentives counsel for the premiere tax credit/investment firm for independent productions in Louisiana, as well as for multiple entertainment productions and infrastructure projects. She has been actively involved in modifications and re-enactments of the Louisiana Motion Picture Incentive Program since its first major revision by the Louisiana Legislature in 2002.
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ACT No. 456Regular Session, 2007
HOUSE BILL NO. 936
BY REPRESENTATIVES TOWNSEND, ALEXANDER, ANSARDI, ARNOLD, BADON,BALDONE, BARROW, BAUDOIN, BAYLOR, BOWLER, BRUCE, BURNS,BURRELL, K. CARTER, CAZAYOUX, CRANE, CROWE, CURTIS, DAMICO,DARTEZ, DOERGE, DORSEY, DOVE, DURAND, FARRAR, FAUCHEUX,FRITH, GRAY, GREENE, ELBERT GUILLORY, ELCIE GUILLORY, MICKEYGUILLORY, HEATON, HEBERT, HILL, HONEY, HUNTER, HUTTER,JACKSON, JEFFERSON, KENNEY, LABRUZZO, LAFLEUR, LAFONTA,LAMBERT, LANCASTER, LORUSSO, MARCHAND, MONTGOMERY,MORRELL, MORRIS, ODINET, PIERRE, PINAC, M. POWELL, T. POWELL,QUEZAIRE, RITCHIE, ROMERO, SALTER, SCALISE, GARY SMITH, JANESMITH, JOHN SMITH, ST. GERMAIN, THOMPSON, TRAHAN, WADDELL,WALKER, WHITE, WILLIAMS, WINSTON, AND WOOTON
AN ACT1
To amend and reenact R.S. 36:107(A) and 109(J) and R.S. 47:1123(10), 1125(C)(3), and2
6007, relative to motion picture investor tax credits; to provide for various changes3
and modifications of the credit; to provide for administrators of the tax credit; to4
provide for time limits for the tax credits; to provide for a cap for certain tax credits;5
to provide for application of the Act to certain projects; to dedicate certain fees; and6
to provide for related matters.7
Be it enacted by the Legislature of Louisiana:8
Section 1. R.S. 36:107(A) and 109(J) are hereby amended and reenacted to read as9
follows: 10
§107. Assistant secretaries 11
A. Each office within the Department of Economic Development, except the12
office of management and finance and the governor’s office of film and television13
development office of entertainment industry development, shall be under the14
immediate supervision and direction of an assistant secretary. The assistant secretary15
of each such office shall be appointed by the governor with the consent of the Senate.16
Each shall serve at the pleasure of the governor and shall be paid a salary which shall17
be fixed by the governor, which salary shall not exceed the amount approved for18
such position by the legislature while in session.19
* * *20
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§109. Transfer of boards, commissions, departments, and agencies to Department1
of Economic Development2
* * *3
J. The governor’s office of film and television development office of4
entertainment industry development (R.S. 51:938.1) is placed within the Department5
of Economic Development and shall exercise and perform its functions, duties, and6
responsibilities as provided by law.7
* * *8
Section 2. R.S. 47:1123(10), 1125(C)(3), and 6007 are hereby amended and9
reenacted to read as follows:10
§1123. Definitions11
The following words and phrases as used in this Chapter shall have the12
following meanings unless the context of use clearly indicates otherwise:13
* * *14
(10) "State-certified production" shall mean a production approved by the15
Governor's Office of Film and Television Development or the office of entertainment16
industry development of the Department of Economic Development, and the17
secretary of the Department of Economic Development, produced by a motion18
picture production company domiciled and headquartered in Louisiana which has a19
viable multi-market commercial distribution plan.20
* * *21
§1125. Application for relief from the payment of state sales and use taxes22
* * *23
C.24
* * *25
(3) Applications for relief from the payment of sales and use taxes provided26
for by this Chapter shall be approved by the secretary of the department, after the27
application has been reviewed by the secretary and the recommendation of the28
director of the governor's office of film and television development Governor's29
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Office of Film and Television Development or the office of entertainment industry1
development has been considered.2
* * *3
§6007. Motion picture investor tax credit4
A. Purpose. The primary objective of this Section is to encourage5
development in Louisiana of a strong capital and infrastructure base for motion6
picture film, videotape, digital, and television program productions in order to7
achieve an independent, self-supporting industry. This objective is divided into8
immediate and long-term objectives as follows:9
(1) Immediate objectives are to:10
(a) Attract private investment for the production of motion pictures,11
videotape productions, and television programs in Louisiana.12
(b) Develop a tax and capital infrastructure which encourages private13
investment. This infrastructure will provide for state participation in the form of tax14
credits to encourage investment in state-certified productions and infrastructure15
projects.16
(c) Develop a tax infrastructure utilizing tax credits which encourage17
investments in multiple state-certified production and infrastructure projects.18
(2) Long-term objectives are to:19
(a) Encourage increased employment opportunities within this sector and20
increased global competition with other states in fully developing economic21
development options within the film and video industry.22
(b) Encourage new education curricula in order to provide a labor force23
trained in all aspects of film and digital production.24
(c) Encourage development of a Louisiana film, video, television, and digital25
production and post-production postproduction infrastructure with state of the art26
state-of-the-art facilities.27
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B. Definitions. For the purposes of this Section:1
(1) "Base investment" shall mean the actual investment made and expended2
by:3
(a) A state-certified production in the state as production expenditures4
incurred in this state that are directly used in a state-certified production or5
productions.6
(b) A person in the development of a state-certified infrastructure project.7
(2) "Division" means the division of administration of the office of the8
governor.9
(2)(3) "Expended in the state" in the case of tangible property shall mean10
property which is acquired from a source within the state and, in the case of services,11
shall mean services procured and performed in the state.12
(3)(4) "Headquartered in Louisiana" shall mean a corporation incorporated13
in Louisiana or a partnership, limited liability company, or other business entity14
domiciled and headquartered in Louisiana for the purpose of producing nationally15
distributed motion pictures as defined in this Section.16
(4)(5) "Motion picture" means a nationally distributed feature-length film,17
video, television series, or commercial made in Louisiana, in whole or in part, for18
theatrical or television viewing or as a television pilot. The term "motion picture"19
shall not include the production of television coverage of news and athletic events.20
(5)(6) "Motion picture production company" shall mean a company engaged21
in the business of producing nationally distributed motion pictures as defined in this22
Section. Motion picture production company shall not mean or include any company23
owned, affiliated, or controlled, in whole or in part, by any company or person which24
is in default on a loan made by the state or a loan guaranteed by the state, nor with25
any company or person who has ever declared bankruptcy under which an obligation26
of the company or person to pay or repay public funds or monies was discharged as27
a part of such bankruptcy.28
(7) "Office" means the Governor's Office of Film and Television29
Development until August 15, 2006; thereafter, the term "office" means the office30
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of entertainment industry development in the Department of Economic Development1
provided for in R.S. 51:938.1.2
(6)(8) "Payroll" shall include all salary, wages, and other compensation,3
including related benefits sourced or apportioned to Louisiana.4
(7)(9)"Production expenditures" means preproduction, production, and5
postproduction expenditures directly incurred in this state that are directly used in6
a state-certified production, including without limitation the following: set7
construction and operation; wardrobes, make-up, accessories, and related services;8
costs associated with photography and sound synchronization, lighting, and related9
services and materials; editing and related services; rental of facilities and10
equipment; leasing of vehicles; costs of food and lodging; digital or tape editing, film11
processing, transfer of film to tape or digital format, sound mixing, special and visual12
effects; total aggregate payroll; music, if performed, composed, or recorded by a13
Louisiana musician, or released or published by a Louisiana-domiciled and14
headquartered company; airfare, if purchased through a Louisiana-based travel15
agency or travel company; insurance costs or bonding, if purchased through a16
Louisiana-based insurance agency; or other similar production expenditures as17
determined by rule. This term shall not include postproduction expenditures for18
marketing and distribution, any indirect costs, any amounts that are later reimbursed,19
any costs related to the transfer of tax credits, or any amounts that are paid to persons20
or entities as a result of their participation in profits from the exploitation of the21
production.22
(8)(10) "Resident" or "resident of Louisiana" means a natural person and, for23
the purpose of determining eligibility for the tax incentives provided by this Chapter,24
any person domiciled in the state of Louisiana and any other person who maintains25
a permanent place of abode within the state and spends in the aggregate more than26
six months of each year within the state.27
(11) "Secretary" means the secretary of the Department of Economic28
Development.29
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(9)(12) "State-certified infrastructure project" shall mean an a film, video,1
television, and digital production and postproduction facility infrastructure project,2
and movable and immovable property and equipment related thereto, or any other3
facility which supports and is a necessary component of such proposed state-certified4
infrastructure project, all as determined and approved by the Governor's Office of5
Film and Television Development and office, the secretary of the Department of6
Economic Development, and the division of administration under such terms and7
conditions as are authorized by this Section. The term "infrastructure project" shall8
not include movie theaters or other commercial exhibition facilities.9
(10)(13) "State-certified production" shall mean a production approved by10
the Governor's Office of Film and Television Development office and the secretary11
of the Department of Economic Development produced by a motion picture12
production company domiciled and headquartered in Louisiana which has a viable13
multi-market commercial distribution plan.14
C. Investor tax credit; specific productions and projects.15
(1) There is hereby authorized a tax credit against state income tax for16
Louisiana taxpayers for state-certified productions, other than motion picture17
production companies. The tax credit shall be earned by investors at the time18
expenditures are made by a motion picture production company in a state-certified19
production. However, credits cannot be applied against a tax or transferred until the20
expenditures are certified by the Governor's Office of Film and Television21
Development office and the secretary of the Department of Economic Development.22
For state-certified productions, expenditures shall be certified no more than twice23
during the duration of a state-certified production unless the motion picture24
production company agrees to reimburse the Governor's Office of Film and25
Television Development and the Department of Economic Development office for26
the costs of any additional certifications. The tax credit shall be calculated as a27
percentage of the total base investment dollars certified per project.28
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(a) For state-certified productions approved by the Governor's Office of Film1
and Television Development, office and the secretary on or after January 1, 2004, but2
before January 1, 2006:3
(i) If the total base investment is greater than three hundred thousand dollars4
and less than or equal to eight million dollars, each taxpayer shall be allowed a tax5
credit of ten percent of the actual investment made by that taxpayer.6
(ii) If the total base investment is greater than eight million dollars, each7
taxpayer shall be allowed a tax credit of fifteen percent of the actual investment8
made by that taxpayer.9
(iii) The initial certification shall be effective for a period twelve months10
prior to and twelve months after the date of initial certification, unless the production11
has commenced, in which case the initial certification shall be valid until the12
production is completed.13
(b) For state-certified productions approved by the Governor's Office of Film14
and Television Development, office and the secretary on or after January 1, 2006, but15
before July 1, 2010, and for state-certified infrastructure projects approved by the16
Governor's Office of Film and Television Development, on or after July 1, 2005:17
(i) If the total base investment is greater than three hundred thousand dollars,18
each investor shall be allowed a tax credit of twenty-five percent of the base19
investment made by that investor.20
(ii) To the extent that base investment is expended on payroll for Louisiana21
residents employed in connection with a state-certified production, each investor22
shall be allowed an additional tax credit of ten percent of such payroll. However, if23
the payroll to any one person exceeds one million dollars, this additional credit shall24
exclude any salary for that person that exceeds one million dollars.25
(iii) The initial certification shall be effective for a period twelve months26
prior to and twelve months after the date of initial certification, unless the production27
has commenced, in which case the initial certification shall be valid until the28
production is completed.29
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(iii) Until January 1, 2008, if the total base investment is greater than three1
hundred thousand dollars, each taxpayer shall be allowed a tax credit of fifteen2
percent of the base investment made by that taxpayer that is expended in this state3
on a state-certified infrastructure project as certified by the Governor's Office of Film4
and Television Development, the Department of Economic Development, and5
approved by the division of administration.6
(c) For state-certified productions approved by the Governor's Office of Film7
and Television Development and the Department of Economic Development, office8
and the secretary on or after July 1, 2010, but before July 1, 2012:9
(i) If the total base investment is greater than three hundred thousand dollars,10
each investor shall be allowed a tax credit of twenty percent of the base investment11
made by that investor.12
(ii) To the extent that base investment is expended on payroll for Louisiana13
residents employed in connection with a state-certified production, each investor14
shall be allowed an additional tax credit of ten percent of such payroll. However, if15
the payroll to any one person exceeds one million dollars, this additional credit shall16
exclude any salary for that person that exceeds one million dollars.17
(iii) The initial certification shall be effective for a period twelve months18
prior to and twelve months after the date of initial certification, unless the production19
has commenced, in which case the initial certification shall be valid until the20
production is completed.21
(d) For state-certified productions approved by the Governor's Office of Film22
and Television Development and the Department of Economic Development, office23
and the secretary on or after July 1, 2012:24
(i) If the total base investment is greater than three hundred thousand dollars,25
each investor shall be allowed a tax credit of fifteen percent of the base investment26
made by that investor.27
(ii) To the extent that base investment is expended on payroll for Louisiana28
residents employed in connection with a state-certified production, each investor29
shall be allowed an additional tax credit of ten percent of such payroll. However, if30
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the payroll to any one person exceeds one million dollars, this additional credit shall1
exclude any salary for that person that exceeds one million dollars.2
(iii) The initial certification shall be effective for a period twelve months3
prior to and twelve months after the date of initial certification, unless the production4
has commenced, in which case the initial certification shall be valid until the5
production is completed.6
(e) Motion picture investor tax credits associated with a state-certified7
production shall never exceed the total base investment in that production.8
(2)(a) Beginning July 1, 2005, and ending on January 1, 2009, there shall be9
allowed a credit against state income tax for state-certified infrastructure projects10
which meet the criteria provided for in this Paragraph and which are approved by the11
office, the secretary of the Department of Economic Development, and the division12
of administration. The tax credit shall be equal to forty percent of the base13
investment expended in this state on such project which is in excess of three hundred14
thousand dollars. The total tax credit allowed for any state-certified infrastructure15
project shall not exceed twenty-five million dollars, and the tax credit shall be earned16
and may be structured as provided for in this Paragraph.17
(b)(i) An infrastructure project shall be approved if it is a film, video,18
television, or digital production or postproduction facility.19
(ii) However, if all or a portion of an infrastructure project is a facility which20
may be used for other purposes unrelated to production or postproduction activities,21
then the project shall be approved only if a determination is made that the multiple-22
use facility will support and will be necessary to secure production or postproduction23
activity for the production and postproduction facility and the applicant provides24
sufficient contractual assurances that:25
(aa) The facility will be used as a state-of-the-art production or26
postproduction facility, or as a support and component thereof, for the useful life of27
the facility.28
(bb) No tax credits shall be earned on such multiple-use facilities until the29
production or postproduction facility is complete.30
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(c) Tax credits for infrastructure projects shall be earned only as follows:1
(i) Construction of the infrastructure project shall begin within six months of2
the initial certification provided for in Subparagraph (D)(2)(c) of this Section.3
(ii) Expenditures shall be certified by the office, the secretary, and the4
division as provided for in Paragraph (D)(2) of this Section, and credits are not5
earned until such certification.6
(iii) Twenty-five percent of the total base investment provided for in the7
initial certification of an infrastructure project pursuant to Subparagraph (D)(2)(d)8
of this Section shall be certified as expended before any credits may be earned.9
(iv) No tax credit shall be allowed for expenditures made for any10
infrastructure project after December 31, 2008, unless fifty percent of total base11
investment provided for in the initial certification of the project pursuant to12
Subparagraph (D)(2)(d) of this Section has been expended prior to that date. The13
expenditures may be finally certified at a later date.14
(v) For purposes of allowing tax credits against state income tax liability and15
transferability of the tax credits, the tax credits shall be deemed earned at the time16
the expenditures are made, provided that all requirements of this Subsection have17
been met and after the tax credits have been certified.18
(d) The office, the secretary, and the division may require the tax credits to19
be taken and/or transferred in the tax period in which the credit is earned or may20
structure the tax credit in the initial certification of the project to provide that only21
a portion of the tax credit be taken over the course of two or more tax years.22
(3) The credit shall be allowed against the income tax for the taxable period23
in which the credit is earned or for the taxable period in which initial certification24
authorizes the credit to be taken. If the tax credit allowed pursuant to this Section25
exceeds the amount of such taxes due for such tax period, then any unused credit26
may be carried forward as a credit against subsequent tax liability for a period not27
to exceed ten years. 28
(3)(4) Application of the credit.29
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(a) All entities taxed as corporations for Louisiana income tax purposes shall1
claim any credit allowed under this Section on their corporation income tax return.2
(b) Individuals, estates, and trusts shall claim any credit allowed under this3
Section on their income tax return.4
(c) Entities not taxed as corporations shall claim any credit allowed under this5
Section on the returns of the partners or members as follows:6
(i) Corporate partners or members shall claim their share of the credit on their7
corporation income tax returns.8
(ii) Individual partners or members shall claim their share of the credit on9
their individual income tax returns.10
(iii) Partners or members that are estates or trusts shall claim their share of11
the credit on their fiduciary income tax returns.12
(4)(5) Transferability of the credit. Any motion picture tax credits not13
previously claimed by any taxpayer against its income tax may be transferred or sold14
to another Louisiana taxpayer or to the Governor's Office of Film and Television15
Development office, subject to the following conditions:16
(a) A single transfer or sale may involve one or more transferees. The17
transferee of the tax credits may transfer or sell such tax credits subject to the18
conditions of this Subsection.19
(b) Transferors and transferees shall submit to the Governor's Office of Film20
and Television Development office, and to the Department of Revenue in writing,21
a notification of any transfer or sale of tax credits within thirty days after the transfer22
or sale of such tax credits. The notification shall include the transferor's tax credit23
balance prior to transfer, a copy of any tax credit certification letter(s) issued by the24
Governor's Office of Film and Television Development and the Department of25
Economic Development office and the secretary of the Department of Economic26
Development and, in the case of an infrastructure project, to the office, the secretary,27
and the division of administration, the name of the state-certified production or28
infrastructure project, the transferor's remaining tax credit balance after transfer, all29
tax identification numbers for both transferor and transferee, the date of transfer, the30
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amount transferred, a copy of the credit certificate, price paid by the transferee to the1
transferor, in the case when the transferor is a state-certified production or state-2
certified infrastructure project, for the tax credits, and any other information required3
by the Governor's Office of Film and Television Development, office or the4
Department of Revenue. For the purpose of reporting transfer prices, the term5
"transfer" shall include allocations pursuant to R.S. 47:6007(C) Paragraph (3) of this6
Subsection as provided by rule. The Governor's Office of Film and Television7
Development office may post on its website web site an average tax credit transfer8
value, as determined by the Governor's Office of Film and Television Development9
office and the secretary of the Department of Economic Development to reflect10
adequately the current average tax credit transfer value. The tax credit transfer value11
means the percentage as determined by the price paid by the transferee to the12
transferor divided by the dollar value of the tax credits that were transferred in13
return. The notification submitted to the Governor's Office of Film and Television14
Development office shall include a processing fee of up to two hundred dollars per15
transferee, and any pricing information submitted by a transferor or transferee shall16
be treated by the Governor's Office of Film and Television Development, office and17
the Department of Revenue as proprietary to the entity reporting such information18
and therefore confidential. However, this shall not prevent the publication of19
summary data that includes no fewer than three transactions.20
(c) Failure to comply with this Paragraph will result in the disallowance of21
the tax credit until the taxpayers are in full compliance.22
(d) The transfer or sale of this credit does not extend the time in which the23
credit can be used. The carry forward carryforward period for credit that is24
transferred or sold begins on the date on which the credit was originally earned or,25
in the case of a structured infrastructure credit, the date upon which the credit is26
allowed to be taken.27
(e) To the extent that the transferor did not have rights to claim or use the28
credit at the time of the transfer, the Department of Revenue shall either disallow the29
credit claimed by the transferee or recapture the credit from the transferee through30
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any collection method authorized by R.S. 47:1561. The transferee's recourse is1
against the transferor.2
(f) Beginning on and after January 1, 2007, the investor who earned the3
motion picture investor tax credits may transfer the credits to the Governor's Office4
of Film and Television Development office for seventy-two percent of the face value5
of the credits. Beginning January 1, 2009, and every second year thereafter, the6
percent of the face value of the tax credits allowed for transferring credits to the7
Governor's Office of Film and Television Development office shall increase two8
percent until the percentage reaches eighty percent. Upon the transfer, the9
Department of Economic Development shall notify the Department of Revenue and10
shall provide it with a copy of the transfer documentation. The Department of11
Revenue may require the transferor to submit such additional information as may be12
necessary to administer the provisions of this Section. The secretary of the13
Department of Revenue shall make payment to the investor in the amount to which14
he is entitled from the current collections of the taxes collected pursuant to Chapter15
1 of such Subtitle II, provided such credits are transferred to the Governor's Office16
of Film and Television Development office within one calendar year of certification.17
(5)(6) The transferee shall apply such credits in the same manner and against18
the same taxes as the taxpayer originally awarded the credit.19
(6)(7) Notwithstanding any other provision of law, on or after January 1,20
2006, a state-certified production which receives tax credits pursuant to the21
provisions of this Chapter shall not be eligible to receive the rebates provided for in22
R.S. 51:2451 through 2461 in connection with the activity for which the tax credits23
were received.24
D. Certification and administration.25
(1)(a) The secretary of the Department of Economic Development and the26
Governor's Office of Film and Television Development office shall determine27
through the promulgation of rules what projects and expenses, including amounts28
expended in this state on stat-certified the minimum criteria that a project must meet29
in order to infrastructure projects qualify according to this Section. The secretary, the30
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office, and the division of administration shall determine through the promulgation1
of rules the minimum criteria that a project must meet in order to qualify according2
to this Section.3
(b) The secretary, the office, and the division of administration shall4
determine, through the promulgation of rules, an appeals process in the event that an5
application for or the certification of motion picture production or infrastructure tax6
credits is denied. The office shall promptly provide written notice of such denial to7
the Senate Committee on Revenue and Fiscal Affairs and the House Committee on8
Ways and Means.9
(c) Prior to adoption, these rules shall be approved by the House Committee10
on Ways and Means and the Senate Committee on Revenue and Fiscal Affairs. 11
(d) When determining what which productions and infrastructure projects12
qualify, the Governor's Office of Film and Television Development office and the13
secretary of the Department of Economic Development and, in the case of14
infrastructure projects, also the division of administration shall take the following15
factors into consideration:16
(a) (i) The impact of the production or infrastructure project on the immediate17
and long-term objectives of this Section.18
(b) (ii) The impact of the production or infrastructure project on the19
employment of Louisiana residents.20
(c) (iii) The impact of the production or infrastructure project on the overall21
economy of the state.22
(2)(a) Application. An applicant for the motion picture investor credit shall23
submit an application for initial certification to the Governor's Office of Film and24
Television Development office and the secretary of the Department of Economic25
Development and, in the case of infrastructure projects, to the office, the secretary,26
and the division of administration that includes the following information:27
(i) For state-certified productions the application shall include:28
(aa) The distribution plan.29
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(bb) A preliminary budget including estimated Louisiana payroll and1
estimated base investment.2
(cc) The script, including a synopsis.3
(dd) A list of the principal creative elements, including the cast, producer,4
and director.5
(ee) A statement that the production will qualify as a state-certified6
production.7
(ff) Estimated start and completion dates.8
(ii) For state-certified infrastructure projects the application shall include:9
(aa) A detailed description of the infrastructure project.10
(bb) A preliminary budget.11
(cc) A statement that the project meets the definition of state-certified12
infrastructure project. A complete detailed business plan and market analysis.13
(dd) Estimated start and completion dates.14
(b) If the application is incomplete, additional information may be requested15
prior to further action by the Governor's Office of Film and Television Development16
office and or the secretary of the Department of Economic Development or, in the17
case of infrastructure projects, the office, the secretary, and the division of18
administration. An application fee shall be submitted with the application based on19
the following:20
(i) 0.2 percent times the estimated total incentive tax credits.21
(ii) The minimum application fee is two hundred dollars, and the maximum22
application fee is five thousand dollars.23
(c) The Governor's Office of Film and Television Development office and the24
secretary and, in the case of infrastructure projects, the division shall submit its their25
initial certification of a project as a state-certified production or infrastructure project26
to investors and to the secretary of the Department of Revenue indicating the total27
base investment which shall be expended in the state on the state-certified production28
or state-certified infrastructure project and, in the case of state-certified infrastructure29
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projects, when such tax credits may be taken or transferred. The initial certification1
shall include a unique identifying number for each state-certified production.2
(d)(i) Prior to any final certification of the state-certified production or3
infrastructure project, the motion picture production company or applicant for the4
infrastructure project shall submit to the office and the secretary and, in the case of5
infrastructure projects, to the office, the secretary, and the division, a cost report of6
production or infrastructure project expenditures audited and certified by an7
independent certified public accountant as determined by rule. The office and the8
secretary and, in the case of infrastructure projects, the office, the secretary, and the9
division shall review the production or infrastructure project expenses and will issue10
a final tax credit certification letter indicating the amount of tax credits certified for11
the state-certified production or state-certified infrastructure project to the investors.12
The rules required by this Subparagraph, shall, at a minimum, require that:13
(i) The auditor shall be a Certified Public Accountant licensed in the state of14
Louisiana and shall be an independent third party, not related to the producer.15
(ii) The auditor's opinion shall be addressed to the party which has engaged16
the auditor (e.g., directors of the production company, producer of the production).17
(iii) The auditor's name, address, and telephone number shall be evident on18
the report.19
(iv) The auditor's opinion shall be dated as of the completion of the audit20
fieldwork.21
(v) The audit shall be performed in accordance with auditing standards22
generally accepted in the United States of America and the auditor shall have23
sufficient knowledge of accounting principles and practices generally recognized in24
the film and television industry.25
(3) The secretary of the Department of Revenue, in consultation with the26
office and the secretary of the Department of Economic Development and the27
director of the Governor's Office of Film and Television Development and, in the28
case of infrastructure projects, also the division of administration, shall promulgate29
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such rules and regulations as are necessary to carry out the intent and purposes of1
this Section in accordance with the general guidelines provided herein.2
(4)(i) Any taxpayer applying for the credit shall be required to reimburse the3
Governor's Office of Film and Television Development and the Department of4
Economic Development office for any audits required in relation to granting the5
credit.6
(ii)(aa) The production or infrastructure project application fee provided for7
in Subparagraph (2)(b) of this Subsection received by the office shall be deposited8
upon receipt in the state treasury. After compliance with the requirements of Article9
VII, Section 9(B) of the Constitution of Louisiana relative to the Bond Security and10
Redemption Fund and prior to any money being placed into the general fund or any11
other fund, an amount equal to that deposited as required by this Item shall be12
credited by the treasurer to a special fund hereby created in the state treasury to be13
known as the Entertainment Promotion and Marketing Fund. The money in the fund14
shall be appropriated by the legislature to be used solely for promotion and15
marketing of Louisiana's entertainment industry.16
(bb) The money in the fund shall be invested by the treasurer in the same17
manner as money in the state general fund and interest earned on the investment of18
the money shall be credited to the fund after compliance with the requirements of19
Article VII, Section 9(B) of the Constitution of Louisiana relative to the Bond20
Security and Redemption Fund. All unexpended and unencumbered money in the21
fund at the end of the year shall remain in the fund.22
(5) A motion picture production company applying for the additional credit23
for the employment of Louisiana residents must remit a schedule to the Department24
of Revenue, in a machine-sensible format approved by the secretary of the25
Department of Revenue, that includes the following information: the names of all26
persons who received salary, wages, or other compensation for services performed27
in Louisiana in connection with the state-certified production, and the address,28
taxpayer identification number, permanent address of, and the amount of29
compensation for services performed in Louisiana received by each such person.30
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(6) With input from the Legislative Fiscal Office, the Governor's Office of1
Film and Television Development and the Department of Economic Development2
office shall prepare a written report to be submitted to the Senate Committee on3
Revenue and Fiscal Affairs and the House of Representatives Committee on Ways4
and Means no less than sixty days prior to the start of the Regular Session of the5
Legislature in 2007, and every second year thereafter. The report shall include the6
overall impact of the tax credits, the amount of the tax credits issued, the number of7
net new jobs created, the amount of Louisiana payroll created, the economic impact8
of the tax credits and film industry, the amount of new infrastructure that has been9
developed in the state, and any other factors that describe the impact of the program.10
(7) Either the Department of Economic Development or the Department of11
Revenue may audit the cost report submitted by the motion picture production12
company.13
E. Recapture of credits. If the Governor's Office of Film and Television14
Development and the Department of Economic Development find office finds that15
funds monies for which an investor received tax credits according to this Section are16
not invested in and expended with respect to a state-certified production within17
twenty-four months of the date that such credits are earned, and with respect to a18
state-certified infrastructure project also within the time provided for in Paragraph19
(C)(2) of this Section, then the investor's state income tax for such taxable period20
shall be increased by such amount necessary for the recapture of credit provided by21
this Section.22
F. Recovery of credits by Department of Revenue. (1) Credits previously23
granted to a taxpayer, but later disallowed, may be recovered by the secretary of the24
Department of Revenue through any collection remedy authorized by R.S. 47:156125
and initiated within three years from December thirty-first of the year in which the26
twenty-four-month investment period specified in R.S. 47:6007(E) Subsection E of27
this Section ends.28
(2) The only interest that may be assessed and collected on recovered credits29
is interest at a rate three percentage points above the rate provided in Civil Code30
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Article 2924(B)(1) R.S. 9:3500(B)(1), which shall be computed from the original due1
date of the return on which the credit was taken.2
(3) The provisions of this Subsection are in addition to and shall not limit the3
authority of the secretary of the Department of Revenue to assess or to collect under4
any other provision of law.5
Section 3.(A) The office of entertainment industry development created in the6
Department of Economic Development by Act No. 346 of the 2006 Regular Session of the7
Legislature shall be the successor to the Governor's Office of Film and Television8
Development for purposes of the motion picture investor tax credit in R.S. 47:6007 as of9
August 15, 2006, and all the acts of such office as such successor with regards to such tax10
credit are hereby ratified. 11
(B) It is the intention of this Act that the approvals provided for in this Act and the12
requirements for state-certified infrastructure projects in R.S. 47:6007(C)(2) as amended and13
reenacted in this Act shall be required for any state-certified infrastructure project which has14
not applied for initial certification or pre-certification prior to August 1, 2007.15
(C) An application for an infrastructure project filed on or before August 1, 2007,16
shall have twenty-four months from the date of approval of the rules or January 1, 2008,17
whichever is earlier, in which to qualify for the forty percent tax credits earned on18
expenditures. Tax credits on infrastructure projects shall be considered earned in the year19
in which expenditures are made, provided that a minimum of twenty percent or ten million20
dollars of the total base investment provided for in the initial certification that is unique to21
film production infrastructure shall be expended before infrastructure tax credits can be22
earned on expenditures. The payment of tax credits may extend beyond or be made after the23
year expenditures are made.24
Section 4. It was the intent of the legislature, in enacting the provisions of Act No.25
456 of the 2005 Regular Session, that the motion picture tax credits authorized according to26
the provisions of R.S. 47:6007 for state-certified infrastructure projects shall only apply to27
infrastructure projects directly related to the acquisition and construction of a film, video,28
television, or video production or postproduction facility and shall not apply to any29
infrastructure project such as a hotel or lodging facility, golf course, or retail shopping30
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facility or other facility which the division of administration and the Department of1
Economic Development deems unrelated to the acquisition and construction of a film, video,2
television, or video production or postproduction facility.3
Section 5. This Act shall become effective on July 1, 2007.4
INFORMATION ABOUT LOUISIANA’S FILM INCENTIVE What is the film production incentive called? Motion Picture Investor Tax Credit How much is the incentive? A 25% investor tax credit is granted based upon the total in-state expenditures of a motion picture production. An additional 10% labor tax credit is earned on the payroll of Louisiana residents that are employed by a film or television production. The tax credits are fully transferable. Louisiana has no limit to the amount of tax credits that can be earned. How does a tax credit work? A tax credit can be applied toward Louisiana state income tax. Since most motion picture investors do not have Louisiana tax liability, the credit can not be personally utilized. This is why the tax credit is fully transferable. Anyone may purchase the tax credit. Generally, tax credit brokers purchase a motion picture project’s earned tax credits. For a listing of tax credit brokers visit: http://www.louisianaentertainment.gov/film_services/labor.cfm (category Tax Credit Broker). If the incentive is based on location spend what exactly does "in-state spend" mean? Location spend includes pre-production, production, & post-production expenditures directly incurred in Louisiana that are used in a state-certified production; including without limitation expenses such as above-the-line and below-the-line expenses, equipment rental & purchases, travel, props, location fees, payroll, editing, and sound mixing. Does local spend include the following? Foreigners working in Louisiana? The 25% credit includes the entire spend on payroll (above and below the line) regardless of where the cast or crew are domiciled. To earn an additional 10% on local hire payroll, that labor must be a resident of Louisiana (which is defined as a person with permanent residence in Louisiana for at least six months of the year). Finance Fees? Yes, as long as it is purchased from a Louisiana company. Bond Fees? Yes, as long as it is purchased from a Louisiana company. Per diems? Yes. Eligibility - who can use this incentive? A motion picture project is a feature-length film, video, television episode, Movie of the Week, or commercial made in Louisiana. Only television coverage of news and athletic events is excluded. The motion picture project must spend at least $300,000 in Louisiana to qualify. How do I apply? A production becomes a state-certified production by filling out an application: http://www.louisianaentertainment.gov/incentives/apply.cfm, then submitting the application with fee to the Office of Entertainment Industry Development. For more information about Louisiana’s incentives, experienced crew, or film equipment & services contact:
Louisiana Office of Entertainment Industry Development http://www.louisianaentertainment.gov Tel 1 (225) 342 5403 E: [email protected]
Made in Louisiana 2008 Beyond A Reasonable Doubt Nu Image Millenium
Billy the Exterminator A&E
Chess East Coast Films (independent) Cirque du Freak Donners’ Company - Universal Comeback The Weinstein Company Drones LAMP Fab Five: Texas Cheerleader Scandal Fox TV / Lifetime Final Destination 4 New Line Cinema Disaster Movie Lionsgate I Love You Phillip Morris Mad Chance & Europa Corp (independent) Imagination Movers ABC Family / Disney Judgment Day Bullet Films (independent) Jumper (1 scene) New Line Cinema Librarian 3 Electric Entertainment (independent) Lightning Strikes Films In Motion (independent) Living Proof Lifetime / Sony Mardi Gras Beacon Pictures / Sony Midnight Man The Weinstein Company Streets of Blood Millenium NuImage Middle of Nowhere Bold Films (independent) Mike Epps Comedy Mixtape Vol.1 Comedy Central Miracle at St. Anna 40 Acres & A Mule Filmworks (Spike Lee) Patriots The Weinstein Company Print LAMP Robo-Sapien Crystal Sky Sordid Lives: The Series Logo Network Soul Men The Weinstein Company Speed Freaks Comedy Central Sunday, Sunday, Sunday Zydeco Productions (independent) Tekken Crystal Sky The Abduction of Jesse Bookman Films in Motion (independent) The Family That Preys The Tyler Perry Company / Lionsgate
The Informant (Post Only) Groundswell Productions (Steven Soderbergh)
The Open Road Odd Lot Entertainment (independent) The Year One Apatow Productions / Columbia Pictures 12 Rounds Midnight Sun Pictures W. independent (Oliver Stone) True Blood HBO (Alan Ball)
Bobby Jindal Stephen Moret Governor Secretary
LOUISIANA ECONOMIC DEVELOPMENT Office of Entertainment Industry Development
Louisiana Economic Development Office of Entertainment Industry Development
Motion Picture Production: Tax Credit Application **This application and all related information submitted with it will become “public record” under the Louisiana Public Records Act, in Title 44 of the Louisiana Revised Statutes, except for those materials excluded by said Act. If the applicant determines that the information being submitted is excluded by said Act, then please provide a cover sheet stating that “DOCUMENTS CONTAIN CONFIDENTIAL PROPRIETARY OR TRADE SECRET INFORMATION” & mark each individual page as such**
Production Title: ____________________________________________________ Phone Number: _________________ Production Company Name & Address: _______________________________________________ Fax Number: ___________________ Louisiana Production Office Address: __________________________________________________________________________________ Name & Position: ________________________________________ E-mail Address: ______________________________________
Preliminary Total Budget (in dollars): _________________ Estimated Expenditures in Louisiana (in dollars): ___________________ Estimated Louisiana Payroll (in dollars): ___________________________ Pre-Production Dates: _________________________________ Anticipated Start/Wrap Dates in Louisiana: _________________ Total Production Days: __________ Louisiana Shooting Days: ________ Type of Project: Please Circle One Feature Film TV Movie/Pilot/Series
Commercial or Music Video Other (please explain) _____________________________
I hereby certify that the information provided in this application is true and correct, and I am aware that my submission of any false information or omission of any pertinent information resulting in the false representation of a material fact may subject me to civil and/or criminal penalties for filing of false public records and/or forfeiture of any investor or labor tax credits approved under this program. I also understand that any final certification of investor credits will be subject to the submission & review of an independent audit conducted by a Certified Professional Accountant licensed in the state of Louisiana; that employees that are claimed as Louisiana hires, must each fill out a “Declaration of Residency” form to be kept on file by the production company & that if I am applying for the additional credit for employment of Louisiana residents, I must remit a detailed schedule to the Department of Revenue as required by La R.S. 47:6007(D)(5). Additionally, I agree that the finished product shall contain an acknowledgement that the production was filmed in Louisiana and such brand/logo shall be included in the credits. Finally, I understand that this application and information submitted with it shall not be returnable to the applicant. Signature of company representative:
Name Signature Date Please complete and return this application, with attachments & payment to: Office of Entertainment Industry Development Post Office Box 94185 ,Baton Rouge, Louisiana 70804/ 1051 North 3rd Street, Baton Rouge, 70802 (physical) Christopher Stelly 225.342.5403 225.342.5554 (fax) [email protected] REQUIRED ADDITIONAL INFORMATION (*all information below must be received before pre-certification is issued):
a. Detailed Preliminary Budget (including above & below the line hires) b. Detailed Distribution Plan c. Script, Synopsis (including principle creative elements: cast, producer, director, etc.) & statement that the project meets
the definition of a state-certified production. d. Application Fee (minimum: $200 / maximum: $5000): Fee is assessed as 0.2% of 25% of Your Estimated
Expenditures in Louisiana. Please make the check or money order payable to the Louisiana Department of Economic Development. NO CASH ACCEPTED & the fee is NON-REFUNDABLE.