Louisiana Administrative Code
Title 61 - REVENUE AND TAXATION
Part I - Taxes Collected and Administered by the Secretary of Revenue
Chapter 69 - Musical and Theatrical Production Income Tax Credit Program
Section I-6994 - Illustrative Examples of Production Expenses

1. salary expenses directly relating to the development of a state certified production, with position titles including but not limited to: stagehands, crew, electricians. When determining eligibility, LED will consider job title, job description, staff resumes and any other factors it deems most appropriate under the circumstances;

2. artist compensation directly relating to performance days in Louisiana;

3. set construction and operation expenses;

4. special and visual effects expenses;

5. costumes, wardrobes and make-up accessories expenses;

6. costs associated with sound, lighting and staging.

1.

2. state and local taxes;

3. any expenditures related to out of state production;

4. any costs later reimbursed by a third party;

5. any costs related to the transfer of tax credits.

6. any amounts that are paid to persons or entities as a result of their participation in profits from the exploitation of the production;

7. the expenditure verification report fee;

8. merchant fees;

9. royalties;

10. online purchases. Production expenses must be taxable transactions made in Louisiana, from a source within the state to qualify. Unless purchased from a source within the state, online purchases do not qualify.

1. artist compensation for non-performance days, such as rehearsals, shall be limited to no more than 20 percent of total base investment for performances in Louisiana;

2. where goods are provided by a related party, qualifying expenditures are limited to fair market value, which may be established through the related partys historic dealings with unrelated parties, or actual transactions between other unrelated parties, for substantially similar goods. The comparable transactions must be substantially similar, considering the type of goods, the geographic market, and other pertinent variables;

For Example: The production company has recently acquired the same type of goods in Louisiana at the same price from an unrelated third party. If FMV cannot be established, qualifying expenditures will be limited to the internal cost recovery rate, consisting of actual documented acquisition cost, plus ongoing maintenance and upgrade cost, divided by anticipated utilization over the real useful life.

3. where services are provided by a related party, qualifying expenditures are limited to the actual compensation paid by the related party to its employee actually performing the service (including employer-paid benefits), allocated to the production on an hourly basis. Related party transactions must be supported by an audit and documentation as requested by LED, which may include (but is not limited to) third-party contracts, notarized affidavits, tax records, and cancelled checks;

4. any expenses made on behalf of a state certified production, by an entity other than the applicant approved by LED and being claimed for tax credits, must be submitted with additional supporting documentation as requested by LED.