TAX INCENTIVES FOR FILMING

AND PRODUCING MOTION PICTURES

The Louisiana Motion Picture Incentive Act (the "Act"), along with other provisions of Louisiana state tax laws, provide tax credits and tax exemption incentives to attract and encourage the production of motion pictures filmed or produced in Louisiana. The Act broadly defines "motion pictures" to include feature length films, television series or pilots, music videos and nationally distributed commercials.

The centerpiece of the incentives is the Investor Tax, a sellable tax credit. Additional incentives include a Sales and Use Tax Exclusion and an Employment/Labor Tax Credit. Each of these programs is described below.

INVESTOR TAX CREDIT

The Investor Tax Credit program provides a transferable tax credit against Louisiana income tax in return for investing in the filming or production of a motion picture. The credit is 10% of the investment for investments between $300,000 and $8 million and 15% for investments over $8 million.

The true reward to the investor holding an Investor Tax Credit is the ability to transfer the tax credit to another Louisiana taxpayer. There is a ready-made market for these credits via a recently created tax credit brokerage system. Accordingly, an investor can quickly convert the credit to cash that can be used to recoup a portion of the filming and production costs.

SALES AND USE TAX EXCLUSION

Louisiana also rewards production companies that spend more than $250,000 filming or producing in Louisiana by eliminating the burden of the 4% state sales and use taxes on purchases which would have otherwise been incurred during the filming and production process.

EMPLOYMENT/LABOR TAX CREDIT

The Employment/Labor Tax Credit program provides a tax credit of up to 20% of the total payroll of Louisiana residents employed in connection with filming or production in Louisiana . The credit can be applied to any Louisiana income or corporate franchise tax liability owed by the production company. When production costs in Louisiana exceed $1 million, the production company will receive a credit of 20% of the payroll of Louisiana residents. The credit is 10% of the payroll of Louisiana residents when production costs are between $300,000 and $1 million.

For more information please contact John A. Rouchell, Thomas M. Long, or Jonathan G. Wilbourn at 504.585.7711.

The information contained in this document covers several topics in a general overview. This document is not intended to and does not constitute legal advice. Questions involving particular situations of a legal nature should be directed to an attorney.