Current through Register Vol. 50, No. 3, March 20, 2024
A. Eligible. Eligible production expenditures
shall include, but not be limited to, studio rental, musician/ performance
fees, travel and airfare if booked through a Louisiana travel agent, producer
fees within limitation, legal fees within limitation, music copying fees,
orchestration fees, music publishing/clearance fees, and fees for mixing and
mastering only on recordings originally made in Louisiana.
B. Ineligible. Ineligible costs include, but
are not limited to, CD duplication, costs for marketing and distribution and
any costs associated with filming/video.
C. Limitations for Certain Transactions
1. Related Party Transactions. LED may
request and use additional information in determining the extent to which
expenditures for related party transactions will be certified, by requesting
and obtaining documentation including, but not limited to, third-party
contracts, notarized affidavits, tax records, W2s, 1099s and cancelled checks.
Related party transactions may be referred to the Office of the Inspector
General for further review.
2.
Producer fees may be subject to limitation as follows.
a. Applicants must provide detailed
accounting and verification of expenditures relating to "all-in producer
deals." For example, audits must reflect payments made to all vendors, and
Producer Agreements should reflect the scope of services to be provided in
Louisiana and include a clause allowing the State to audit the Producer's
accounting records directly related to any expenses claimed for tax
credits.
b. LED establishes a
benchmark of up to 20 percent of total qualifying Louisiana production
expenditures for Producers Fees (for the calculation, Louisiana production
expenditures exclude any producer fees), which shall be considered fair market
value. While applicants may enter into producer agreements with fees in excess
of LED's approved benchmark, producer fee payments exceeding 20 percent may not
be eligible to earn tax credits.
c.
LED establishes a benchmark of up to 12 percent of total qualifying Louisiana
production expenditures (for the calculation, Louisiana production expenditures
exclude any producer fees), for related-party producer fee expenditures, which
must be supported by a cost report or audit, when applicable, and documentation
of services provided. Fair market value for related-party services rendered
must also be established by submission of third-party contracts for
similarly-sized projects and scope of work or other documents as approved by
LED. While productions may enter into agreements with fees in excess of LED's
approved benchmark, payments exceeding 12 percent will not be eligible to earn
tax credits unless the benchmark is exceeded through expenditures (supported by
a cost report or audit, when applicable, and documentation of services
provided) under third-party contracts only with no related-party
expenditures.
3. Legal
fees shall be limited to no more than 10 percent of base investment.
AUTHORITY NOTE:
Promulgated in accordance with
R.S.
47:6023.
