Magazine article Variety

Louisiana Overcomes Speed Bump and Keeps on Truckin'

Magazine article Variety

Louisiana Overcomes Speed Bump and Keeps on Truckin'

Article excerpt

OVER THE PAST DECADE, rising from the devastation of Hurricane Katrina, the state of Louisiana has emerged as one of the largest film and television production centers in the U.S. - helped to a large degree by its generous tax incentives, but also by a deep and experienced crew base, and by far lower production and livings costs than those found in the media capitals of Los Angeles and New York.

The big draw - a 30% tax credit on all eligible production expenditures - has made the state a major destination for studios and indie producers alike. Films and TV shows shot wholly or partly in Louisiana read like a showbiz hits list: "The Expendables," "Pitch Perfect," "The Curious Case of Benjamin Button," "Django Unchained," "Duck Dynasty," "21 Jump Street," "Treme," "Scream Queens," "12 Years a Slave" and "Jurassic World."

Until recently, that incentive was uncapped, with no limit on the amount the state could reimburse producers each year. But in June, Gov. Bobby Jindal signed a bill capping the annual tax credits at $180 million and also suspending for a year Louisiana's tax credit buyback program whereby credits can be cashed in for 85 cents on the dollar. Credits earned after the $180 million cap is reached can still be cashed in the following year. That could be a problem for smaller projects that use credits to cash-flow production.

While the move - made to balance the state budget - set off some alarm bells in the production community, many Hollywood execs believe the concern was exaggerated.

Joseph Chianese, senior VP of taxes, business development and production planning at payroll giant Entertainment Partners - and an expert on incentive financing - says in the past the absence of an annual cap had made producers "very comfortable." Now, he adds, "You have to think about what you're doing and when the audit will be done ... but I wouldn't say interest has diminished. Louisiana remains a big draw for producers."

Patrick Mulhearn, executive director of Celtic Studios in Baton Rouge, says he's convinced any issues caused by the new cap are temporary. He notes that only $10 million has been redeemed so far in the first three months of the fiscal year.

Mulhearn also points out that all four candidates for governor to succeed Jindal have called for a special session in January or February to change the tax credit rules. …

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