Louisiana Administrative Code
Title 61 - REVENUE AND TAXATION
Part I - Taxes Collected and Administered by the Secretary of Revenue
Chapter 61 - Motion Picture Production Tax Credit Program
Section I-6107 - Certification Procedures

Universal Citation: LA Admin Code I-6107

Current through Register Vol. 50, No. 9, September 20, 2024

A. Application and Expenditure Verification Report Fees

1. An application for initial certification shall be submitted with an application fee of 0.5 percent of the estimated total tax credits, with a minimum fee of $500, and a maximum fee of $15,000, payable to the office, as required by R.S. 36:104.
a. All applications shall include information as required by R.S. 47:6007(D)(2)(a).

b. In addition, the following program specific information is required.
i. Production:
(a). working title of the production. Should the title change, the state-certified production needs to inform the office as soon as that change is made;

(b). name of the requesting production company;

(c). name, telephone number, e-mail address and attesting signature of the requesting production company's contact person;

(d). approximate beginning and ending date of production in Louisiana;

(e). Louisiana office address;

(f). telephone number of requesting company's Louisiana office address;

(g). estimated total production-related costs of production;

(h). estimated total amount of production-related costs to be expended in Louisiana;

(i). estimated total payroll to be paid by the requesting production company to Louisiana residents employed by the requesting production company in connection with the production;

(j). a preliminary budget including the estimated Louisiana payroll and estimated in-state investment;

(k). a copy of script (including synopsis) will be made available to OEID and subsequently returned to the applicant;

(l). list of principal creative elements such as principal cast, producer, and director; and

(m). facts sufficient for the office and the department to determine each of the following:
(i). that the requesting production company is a motion picture production company as defined in R.S. 47:6007(B)(6);

(ii). that the requesting production company is domiciled and headquartered in Louisiana; and

(iii). that the requesting production company has either a viable multi market distribution plan or a signed distribution agreement with either a major theatrical exhibitor, television network or cable television programmer for distribution of the production.

ii. Repealed.

c. Expenditure Verification Report Fee. The department shall directly engage and assign a CPA to prepare an expenditure verification report on an applicants cost report of production or project expenditures. Applicants shall submit an advance deposit at the time of application, and shall later be assessed the departments actual cost based upon an hourly rate not to exceed $250, in the amounts set forth below:
i. for applicants with project expenditures greater than $50,000 but less than $300,000, an advance deposit of $5,000, with a maximum fee of $10,000;

ii. for applicants with project expenditures greater than $300,000 but less than $25,000,000, an advance deposit of $7,500, with a maximum fee of $15,000;

iii. for applicants with project expenditures greater than $25,000,000, an advance deposit of $15,000, with a maximum fee of $25,000;

iv. if CPA actual costs exceed the advance deposit, the applicant will be billed and LED will not issue any pending final certification letter until receipt of any outstanding balance. Any unused balance shall be refunded to the applicant within 60 days following receipt of CPA's final invoice and payment of all CPA costs;

v. if at the time of application for initial certification, the department is notified that post-production activities will take place in Louisiana, and subsequently such activities are performed in Louisiana, a supplemental request for certification of expenditures directly relating to such post-production activity may be submitted. An advance deposit fee of $7,500 shall be due at time of request for a supplemental verification report, and applicant will again be liable for the actual costs subject to the conditions set forth above.

2. All applicants shall participate in a career based learning and training program approved by the office. To meet this requirement, at the time of application, applicants may choose a method of participation from the list below:
a. provide a minimum of 3 paid internship positions provided to students enrolled in an accredited high school, community college, university or qualified community based program, for a minimum of 75 hours per student and a total of 225 hours; or

b. a minimum of 8 hours of classroom workshop provided to students enrolled in an accredited high school, community college, university or qualified community based program; or

c. a minimum of 8 hours of studio employment and professional skills tour provided to students enrolled in high school, community college, university or qualified community based program; or

d. a minimum of 8 hours of continuing education for educators or faculty to observe the set operations, post production and other specialized departments;

e. financial contribution or donation to a specific local educational agency or higher education institution specializing in arts, media and entertainment career oriented program. Financial contributions calculated at 0.25 percent of the estimated tax credit reservation; or

f. other method of participation approved by the office.

3. An application is not deemed to be complete until all information requested and required fees are received by LED. Required fees include both an application fee and an expenditure verification deposit fee.

B. Qualification. The office and the secretary shall determine whether a production qualifies for certification, by meeting all requirements of R.S. 47:6007 and these regulations, and taking the following factors into consideration:

1. the impact of the production on the immediate and long-term objectives of R.S. 47:6007;

2. the impact of the production on the employment of Louisiana residents;

3. the impact of the production on the overall economy of the state.

C. Initial Certification

1. Application Review Process and Reservation of Tax Credits
a. Project-Based Production Tax Credit-For Applications Submitted prior to July 1, 2017
i. After review and upon a determination of qualification, the office and the secretary shall issue an initial certification letter indicating the amount of tax credits certified for the state certified production, or a written denial.

b. Project-Based Production Tax Credit-for Applications submitted on or after July 1, 2017 but prior to July 1, 2023:
i. Beginning July 1, 2017 and thereafter, the office will accept and review applications on a monthly basis. All applications received by the 15th of the month will be treated as received on the last business day of the month ("monthly initial certification pool") and processed accordingly.

ii. After review and upon determination of qualification, the office and the secretary shall issue an initial certification letter, or a written denial. The initial certification letter will provisionally allocate tax credits based upon expected the cost report submission date and availability of tax credits in any given year.

c. Project-Based Production Tax Credit-for Applications Submitted on or after July 1, 2023
i. Beginning July 1, 2023 and thereafter, the office will accept and review applications on a monthly basis. All applications received by the 15th of the month will be treated as received on the last business day of the month ("monthly initial certification pool") and processed accordingly.

ii. After review and upon determination of qualification, the office and the secretary shall issue an initial certification letter, or a written denial.

2. Additional information may be requested by the office or the department in order to make a determination of eligibility for the program.

3. Cap Management-Phase 1-Initial Certification-Tentative Reservation-for applications received on or after July 1, 2017 and prior to July 1, 2023
a. The reservation of tax credits shall be administered on a first come, first serve basis, until any of the caps have been met:
i. QEC;

ii. LA screenplay;

iii. independent film;

iv. general; or

iv. total cap.

b. Qualifying LA screenplay or independent film projects shall be allocated credits first from the available LA screenplay or independent film caps. On the day that the LA screenplay or independent film caps are met, credits shall be reserved from any remaining general cap.

c. If the LA screenplay and independent film caps have not been met by April 30 of any year, any residual amount of unreserved credits may be available for general allocation by the office, in addition to any residual general cap.

d. If the QEC cap is not met in any fiscal year, any residual unreserved credits shall carry forward for use by QECs in subsequent years.

e. On the day that the total or general cap is reached, the credits remaining for allocation shall be reserved on a prorated basis amongst the monthly initial certification submission pool.

f. If the total amount of credits applied for in any particular year exceeds the total or general cap for that year, the excess shall be treated as having been applied for on the first day of the subsequent year.

4. Duration of Effect-for Applications Submitted prior to July 1, 2017
a. Once an initial certificate is issued by the office, the department (and the division where appropriate), the applicant or official representative must countersign and return an original to the office, within 30 business days, acknowledging initial certification status.

b. For productions, initial certification shall be effective for a period 12 months prior to and 12 months after the date of initial certification, unless the production has commenced, in which case the initial certification shall be valid until the production is completed.

5. Duration of Effect-for Applications Submitted on or after July 1, 2017 and prior to July 1, 2023
a. Once an initial certification letter is issued, the applicant or official representative must countersign and return an original to the office, within 30 business days, acknowledging initial certification status and the reporting requirement for start date of principal photography.

b. The initial certification letter shall be effective for qualifying expenditures made within a period of twelve months prior to the date of application and twenty-four months after the date of initial certification letter, except that:
i. state certified productions for scripted episodic content ("SECs"), with estimated expenditures of at least $10,000,000 in state expenditures per calendar year, shall be issued an initial certification letter effective for qualifying expenditures made until 60 months after the date of initial certification, under terms and conditions approved by the office and the secretary, as set forth in the initial certification letter.

ii. when determining the amount and appropriate allocation and reservation of credits for SECs, the office shall review all pertinent information, including but not limited to; whether the project is a pilot, TV series from a pilot formerly shot in Louisiana, a recurring TV series or a relocating TV series.

iii. unless otherwise approved by the office and the secretary, SEC tax credits will be allocated from the general cap, and initially reserved for two seasons. SEC applicants shall periodically provide updates to the office, and the initial certification letter may be subsequently revised to allow for additional allocations and reservations of credits for seasons three through five, if applicable.

c. Released Credits. Tax credits provisionally allocated to motion picture production companies in initial certification letters, which are subsequently unused by their original holders, may be released and made available for re-allocation or issuance by the department. Any release of credits shall be in writing and where possible, may be agreed to between the department and the motion picture production company, except that:
i. the department reserves the right to release credits for effective administration of the annual program issuance cap, by releasing provisionally allocated credits on May 1 of any given fiscal year, for productions with a reservation in that fiscal year but lacking a supporting expenditure verification report on file with the department. After consideration of all relevant factors, the department may issue a revised initial certification letter provisionally allocating credits in the next available fiscal year, and/or, where appropriate, directly issue tax credits in a final certification letter from released credits, according to the provisions of Paragraph D.4 of this Section.

6. Duration of Effect-for Applications Submitted on or after July 1, 2023
a. Once an initial certification letter is issued, the applicant or official representative must countersign and return an electronic copy to the office via Fastlane, within 30 business days, acknowledging initial certification status.

b. The initial certification letter shall be effective for qualifying expenditures made within a period of twelve months prior to the date of application and twenty-four months after the date of initial certification letter, except that:
i. state certified productions for scripted episodic content ("SEC's"), with estimated expenditures of at least $10,000,000 in state expenditures per calendar year, shall be issued an initial certification letter effective for qualifying expenditures made until 60 months after the date of initial certification, under terms and conditions approved by the office and the secretary, as set forth in the initial certification letter

D. Final Certification; Audit Requirements

1. Prior to any final certification of credits, the motion picture production company applicant shall submit to the office a notarized statement demonstrating conformity with and agreeing to the following:
a. to pay all undisputed legal obligations incurred in the state;

b. to publish upon completion of principal photography a notice at least once a week for three consecutive weeks in local newspapers in regions where filming has taken place, notifying creditors to file any claims within a specific date;

c. that the outstanding obligations are not waived should a creditor fail to file by the specific date;

d. to delay any claims for credits until the office delivers written notice to the Secretary of the Department of Revenue that the production company has fulfilled all requirements for the credit.

2. When requesting final certification of credits, the motion picture production company applicant shall submit to the office the following:
a. a cost report uploaded via Fast Lane, which shall be audited by a state licensed, independent certified public accountant assigned by the office and complying with the minimum standards as required by R.S. 47:6007(D)(2)(d). The cost report may be subject to additional audit by the department or the Department of Revenue, at the applicant's expense.
i. Incorrect Reporting. If an applicant submits a cost report required by the provisions of this Chapter and the report made and filed contains material misstatements, including but not limited to misrepresentation in or intentional omission from the cost report of events, transactions, or other significant information there may be cause for an additional audit.

ii. Related Party Transactions. If an audit contains related party transactions in excess of 20 percent of the total expenditures reported in the submitted audit there may be cause for an additional audit.

iii. Reimbursement of Audit Costs. The department may undertake additional audit at the applicant's expense, to be performed by a state certified public accountant also certified in financial forensics or also certified as a fraud examiner. Audit fees will be assessed at the department's contracted fee;

b. a detailed general ledger in an excel spreadsheet format to be uploaded via Fast Lane, or as otherwise approved by LED. Confidential taxpayer information is to be redacted, with only the last four digits to be included on any social security numbers or financial account numbers.

c. additional information as may be requested.

3. Final Allocation and Issuance of Tax Credits
a. Project-Based Production Credit-for Applications Submitted prior to July 1, 2017
i. After review and upon a determination of qualification, the office and the secretary shall issue a final certification letter indicating the amount of tax credits certified for the state certified production, or a written denial.

b. Project-Based Production Tax Credit-for Applications Submitted on or after July 1, 2017 and prior to July 1, 2023.
i. After review and determination of qualification, the office and the secretary shall issue a final certification letter, in accordance with the provisional allocations and amounts set forth in the initial certification letter, or a written denial.

ii. In the event that less than the reserved amount of tax credits has been verified, any unused credits will be released and may be available for issuance by the office.

iii. In the event that more than the reserved amount of tax credits has been verified, the office shall preliminarily issue tax credits in an amount not to exceed the total indicated in the initial certification letter, but may at its discretion, issue any excess credits in the same final certification letter or subsequently issue a supplemental tax credit for any excess expenditures, subject to availability of credits in any given fiscal year.

c. Project-Based Production Credit-for Applications Submitted on or after July 1, 2023
i. The issuance of tax credits shall be administered on a first come, first serve basis until the program issuance cap has been met, except that legacy credit reservations shall have priority over other final certification requests received by LED on or after the date of the legacy credit reservation final certification request.

ii. After review and upon a determination of qualification, the office and the secretary shall issue a final certification letter indicating the amount of tax credits certified for the state certified production, or a written denial.

4. Cap Management-Phase 2-Final Certification-Tax Credit Issuance for Applications Submitted on or after July 1, 2017 and prior to July 1, 2023
a. The issuance of tax credits shall be administered on a first come, first serve basis, until any of the caps have been met; QEC, LA screenplay, independent film, general or total cap.

b. Qualifying LA screenplay or independent film projects shall be issued credits first from the available LA screenplay or independent film caps. On the day that the LA screenplay or independent film caps are met, credits shall be issued from any remaining general cap.

c. If the LA screenplay and independent film caps have not been met by April 30 of any year, any residual amount of credits may be available for issuance by the office, in addition to any residual general cap.

d. If the QEC cap is not met in any fiscal year, any residual credits shall carry forward for use in subsequent years and may be granted in addition to the QEC cap for each year.

e. If the total amount of credits applied for in any particular year exceeds the total or general cap for that year, the excess shall be treated as having been applied for on the first day of the subsequent year.

f. Use of released credits. Released credits shall be available for re-allocation or issuance by the department as follows.
i. Credits released throughout the year shall be made available periodically at the discretion of the department as released credits accumulate, for re-allocation or issuance to qualifying applicants on a first come first served basis, as determined by the completion notification date.
(a). However, any applicants who have received completion notifications on the same business day shall be treated as received at the same time.

(b). For purposes of this Section, a completion notification shall be issued in writing and only upon confirmation by the department that a motion picture production company has completed all required steps for certification of credits, including but not limited to submission of an expenditure verification report and all necessary support documentation, and payment in full of any CPA fees.

ii. To qualify for issuance of credits from the released credits, motion picture production companies shall lack a tax credit reservation, or the necessary amount of tax credit reservation, for issuance of final certification in the requested fiscal year.

iii. If the total amount of released credits available for re-issuance meets or exceeds the amount of requested credits, the department shall make payment in full to all qualifying applicants.

iv. If the total amount of released credits available for re-issuance is less than the total amount of requested credits, the department shall issue credits in full to all qualified applicants on a first come, first served basis, as determined by the completion notification date. Any requests that cannot be paid in full will remain eligible for payment at a later date, on a first come, first served basis, as determined by the completion notification date, subject to availability of released credits. Partial payments will not be made.

g. If the total amount of credits applied for in any particular year exceeds the total or general cap for that year, the excess shall be treated as having been applied for on the first day of the subsequent year.

E. Appeal Process. In the event that an application for initial or final certification is denied:

1. the office shall promptly provide written notice of such denial to the Senate Committee on Revenue and Fiscal Affairs and the House Committee on Ways and Means;

2. the applicant may appeal as follows:
a. an applicant may appeal within 30 days from receipt of a denial. Receipt will be conclusively presumed from the sending of the denial by electronic mail to an address provided by the applicant or by a return receipt evidencing delivery by U.S. Postal Service or private carrier;

b. the appeal is made by delivery of a written objection, with supporting documentation to the secretary and also in the case of infrastructure projects to the commissioner;

c. within 30 days of receipt of a timely appeal, the secretary (or his designee) and the commissioner, where applicable, will review the appeal, and issue a joint written determination. The secretary and the commissioner may extend the time for the determination for an additional 30 days. In the event the secretary and the commissioner do not agree, or fail to issue a determination within the required time, the appeal is deemed denied;

d. the written determination shall be the final agency decision of the department;

e. the applicant may appeal an adverse decision to the Nineteenth Judicial District Court, which shall be limited to a review of the administrative record.

AUTHORITY NOTE: Promulgated in accordance with R.S. 47:6007 and R.S. 36:104.

Disclaimer: These regulations may not be the most recent version. Louisiana may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.