Louisiana Film Tax Credit Program Deserves Legislative Support

Andre Savoie asked:

Fortunately most Louisiana lawmakers, including Governor Bobby Jindal, see the tax credits as an important part of the state’s economy and are pushing to extend the program. Jindal has said that he will support extending the current 25 percent level of movie tax credits for 2 more years and 5 years on infrastructure credits. Jindal also supports eliminating the 2009 deadline for The Digital Media Production Tax Credit, a program for the development of video games, animation and special effects.

And since lawmakers seem to agree on continuation the debate shifts to the question of what the future should look like for the tax credit program? Among the factors being discussed during the debate over the future shape of Louisiana’s film incentive program are:

* Incentive structure

The Louisiana Motion Picture Act created allows out of state film producers to earn tax credits on their qualified Louisiana based production and labor costs. These tax credits can be converted into cash and help make Louisiana based film productions more lucrative for producers and investors. The percentages and uses of tax credits are something the legislature will carefully consider to ensure the program remains competitive.

* Financial impact of the film industry

The film industry has become a major economic engine for Louisiana. The state film office reports that Louisiana has taken in more than $2 billion in revenues and over $200 million in payroll alone generated by film and TV productions between 2002 and 2008.

* Development of key film support infrastructure

As more film productions continue to take place in Louisiana a strong infrastructure of film related services has taken root all over the state. These include post production services, staffing, finance and even specialty education programs can now be found throughout the state.

* Impact of a worsening economy

Like most states, Louisiana faces a budget shortfall for 2009. Decreases in state revenues make it harder to expand tax incentives in a down economy. However the potential decrease in jobs or revenue from film and TV productions is of more concern to state officials.

* Increased pressure from other states

Given the success of Louisiana’s film program other states are now trying to compete in this sector and have begun offering incentive packages of their own. States like Georgia and Michigan have “upped the ante” by setting tax credits at higher levels than have previously been done before. There is great debate in those states as to whether or not this is financially sustainable but the net effect has been greater competition.

FBT Film and Entertainment would like to see the film tax credits extended in their current state. While other states have created programs with deeper discounts Louisiana has many other factors which help to level the playing field including unique locations, strong film infrastructure, a highly trained workforce and ongoing support from state and local officials.

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