Louisiana Senate Committee Votes to Keep Film Tax Credit While Lowering Cap to $125 Million

As a long-time resident and devotee of the silver screen, I’ve seen the transformative power that film production can have on a community. Living in Louisiana, I’ve witnessed firsthand the economic boom that the film industry has brought to our state, creating jobs, stimulating local businesses, and putting our unique culture on display for the world to see.

On Tuesday, a committee within the Louisiana Senate decided to keep the state’s tax break for movie productions, although they plan to lower the maximum limit of the program from $150 million to $125 million.

Last week, the State House of Representatives decided to abolish an incentive set to end on June 30, 2025, as part of a wide-ranging tax reform plan. This decision sparked a protest by hundreds of people in the halls of the state Capitol in Baton Rouge this past Sunday. The reason for their demonstration is that this action could potentially jeopardize thousands of jobs in the film industry.

On Tuesday, the Senate Committee on Revenue and Fiscal Affairs decided to maintain the film credit but reduce its maximum limit, effective from the following year.

Senator Sam Jenkins, a Democrat from Shreveport, expressed approval towards this action, as well as another initiative aimed at preserving a tax advantage for renovating historical structures.

“Both of these credits in my opinion have shown they are wise investments,” Jenkins said.

However, the ultimate legal decision was yet to be decided. The Senate committee additionally approved modifications that aimed to abolish the refundability of all tax credits. This implies that taxpayers would no longer receive cash returns for credits surpassing their state income tax obligations – a potential concern if this provision were incorporated into the final legislation.

Starting from January 1, 2025, movie tax credits can no longer be given to the Department of Revenue but will only serve to reduce the income tax owed on tax returns instead,” the amendment clarifies.

The present system enables producers to cash out up to $180 million in credits annually, should their tax obligations fall short. In such cases where they possess excess credits, they have the option to offer them back to the Department of Revenue at a reduced value of 90%.

Yearly, the state restricts its issuance to a maximum of $150 million. However, under the proposed changes by the committee, these limits would be reduced to only $125 million.

Among the changes, there’s a provision that brings at least one advantage to the industry. Specifically, if production companies don’t utilize the entire $125 million budget allotted for a particular year, the remaining amount can be carried forward and used in the next year.

In an interview held on Friday, Representative Emily Chenevert, a Republican from Baton Rouge, expressed a significant desire to maintain the industry. She stated, “We aim to assure potential investors that our doors are always open and ready for business.

As a movie buff, I’d say: “I’m glad the committee decided to keep the incentive for restoring historic buildings, even though they trimmed down the budget from $125 million to $85 million.

Governor Jeff Landry convened an extraordinary meeting of the Legislature recently, with the objective of decreasing state income taxes. The idea is to make the state more appealing to businesses by doing so. He suggested lowering personal income tax to 3%, and reducing the corporate income tax (currently reaching up to 7.5%) to a flat rate of 5.5%.

To make up for the income loss, the governor suggested removing around 200 existing tax breaks and levying sales taxes on items and services that aren’t taxed at present. While the tax reductions have been well-received by legislators, several of the compensating measures have sparked debate.

Instead of agreeing to a 5.5% corporate tax rate, the committee was proposed to increase it to 6%, to cover additional expenses related to film preservation and tax credits. However, they voted against this change by 4 votes to 6.

50 Cent’s Curtis Jackson is planning to establish a movie studio in Shreveport, hoping that the state’s film incentives will boost production. Two weeks ago, the Shreveport City Council passed a resolution asking the state Legislature to maintain these film incentives and also preserve historic buildings.

The state of Louisiana, spearheading the advocacy for the film industry, consistently endorses business-friendly tax adjustments. However, they’ve also emphasized that the film credit sustains approximately 10,000 jobs and contributes about a billion dollars to the economy annually.

In a Friday interview, Jason Waggenspack, President of Film Louisiana, expressed his thoughts, stating, “We’re actively exploring the ideal course ahead.” He added, “We maintain a hopeful yet measured outlook.

2024-11-19 22:17

Louisiana Senate Committee Votes to Keep Film Tax Credit While Lowering Cap to $125 Million

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