Louisiana has a ton of incentives that are great for filmmakers. Even if you are located elsewhere, you may be able get great benefit out of producing your next film in Louisiana, through a Louisiana company. In fact, the current laws in Louisiana make it much much easier to raise investment capital than any other state.
The primary reason that production in Louisiana is a great option is the LA film tax credits incentives. If you are shooting a movie with a budget of $300,000 dollars or more, you earn 25% of the budget in tax credits. That’s $75,000. Plus you get an additional 10% worth of credits on the amount you pay to Louisiana residents. Lets assume that 50% of your budget is spent on cast and crew of Louisiana, so that’s $150,000. Ten percent of that (the amount you get of extra payroll tax credits) is $15,000.
So now you have a sum total of $90,000 in tax credits. So….what the hell are tax credits. Well, put simple if you owed $90,000 in Louisiana income tax, you wouldn’t have to pay it. But what if you don’t owe that sort of taxes? This is the part where it gets crazy…you can sell the credits to someone who does.
That’s right, you can take that $90,000 of credits…which you generated simply from finishing the film, and sell them immediately. You have to sell them at a discount (because why would someone spend $90,000 to save $90,000 in taxes). However, some firms who broker such transactions can get you as much as 80 cents on the dollar. That means that your finished film instantly nets you $72,000 cash..
But wait it gets better. These brokerage firms are often able to sell your tax credits ahead of time….that’s right…before your film production even begins, you have already made $72,000..
But what if you don’t have $300,000? Well, the beauty of this whole system is that it helps gaining access to that $300,000 so much easier. If you can guarantee your investors an initial return off the bat, they will see it as much less of a risk. After all, they are receiving around 24% return from day 1.
In addition to all this is the Federal Jobs Creation Act of 2004…a piece of US federal legislation that makes it even more lucrative for investors who invest in films of budgets under $15 million. But I’ll save that discussion for another article.
Because I want to raise awareness of Louisiana’s film production nationally, as well as internationally, I’m adding a Louisiana category for posts, as well as adding a section of Louisiana Resources to my ‘Resources’ page. Expect more articles focusing on Louisiana production in the future, in addition to my usual advice on filmmaking.