and Alexandyr Kentmailto:Kentakent@gannett.com
BATON ROUGE — Tax credits for filming movies, recording music, manufacturing video games and promoting research and development cost Louisiana about $8 million a year but bring more money and attention than that to the state, Gov. Bobby Jindal says.
The governor announced during a news conference Monday he will propose legislation to extend the entertainment tax credits in a package of six extensions of credits that are scheduled to expire or be phased out.
However, a Shreveport movie industry official says the governor’s proposal doesn’t go far enough.
“We want to make sure Louisiana keeps a competitive edge,” Jindal said. “Extending these existing tax incentives is vital to keeping our economy growing.”
“I don’t think it’s good enough,” said Diego Martinez, president of Shreveport-based Studio Operations, a division of Nu Image/Millennium Films, which has shot nine movies in Shreveport.
“We’re not going to try to match Georgia?” he said, referring to an incentives race between states that has built up steam in recent years.
In May, Georgia enacted its Entertainment Industry Investment Act, which offers movies a credit worth up to 30 percent on production and post-production expenditures. Louisiana’s movie credit is 25 percent.
Georgia also offers a sales tax exemption, worth up to 8 percent, on locally purchased goods.
Industry professionals are worried Louisiana’s incentives, as they stand, put the state at a competitive disadvantage.
“What we need now is a concerted effort by everyone who has a stake in this to figure out what is common ground and push forward,” Martinez said.
Though he’d like to see a stronger proposal from Jindal, Martinez sees the governor’s early interest in the incentives as a positive sign. “The fact that the governor is making a comment on this is a good thing.”
The proposals will cost the state $8 million a year when investors cash in the credits, Jindal said, but the state gains much more from having movies, recordings and video games produced here.
Since the state took the lead in offering movie production tax credits, 40 states are competing with similar credits. In recent years, Louisiana has ranked third in movie production behind California and New York.
The film production industry spent more than $429 million in Louisiana in 2007, resulting in an economic impact of $763 million, reported Economics Research Associates.
The governor wants the Motion Picture Investor Tax Credit incentive to remain at 25 percent for another two years. It is set to drop to 20 percent in July 2010 then to 15 percent in July 2012, where it would remain indefinitely unless the Louisiana Legislature changes it.
Besides extending the credits, the governor proposes tightening some of the requirements but says the changes wouldn't affect the credits’ effectiveness.“It will improve the efficiency of the programs.”Jindal said he wants “several targeted technical improvements made to the existing law by tightening the requirements that are used to certify film production spending, and beginning a ‘Louisiana Entertainment’ branding component for productions receiving the tax credit.”
Georgia’s base tax credit is 20 percent. Another 10 percent credit is available to movie producers if a production company includes a Georgia promotional logo in the qualified finished feature film, TV series, music video or video game project.
Jindal said his proposed changes would “improve the efficiency of the incentive program while allowing the state to take advantage of the marketing opportunity presented because of the large audiences who ultimately view the movies being made in Louisiana.”
Another step is to extend and pare down the Motion Picture Infrastructure Tax Credit so it focuses on “priority investments in film facilities.” Jindal said he would work with the Legislature to target local government priority projects.
The infrastructure credit grants tax breaks for constructing sound stages and other facilities used in filming, such as the huge Louisiana Wave Studio in Shreveport. Lawmakers previously trimmed out a loophole that allowed construction of condominiums and a swimming pool for its guests.
Eliminating a proposed phase-out of the Digital Interactive Media Production Tax Credit, which is aimed at attracting video game development, animation and special effects projects, could draw other companies to the state. The uncertainty is putting future investment on hold, Jindal said.
Entertainment Arts (EA) Sports, the first company to utilize the credit, announced a test facility in Baton Rouge last year.
Jindal also proposes extension of the Sound Recording Investor Tax Credit, a tax break for developers of sound studios and music recording operations.
Also on his list are extending the Research and Development and Angel Investor tax credit programs, the latter of which grants tax breaks for individuals who lend start-up money to new companies. Louisiana-based Nerjyzed Entertainment, which makes black college football video games complete with bands at halftime, is an example of a company that benefited from an angel investor in the program.
The governor announced during a news conference Monday he will propose legislation to extend the entertainment tax credits in a package of six extensions of credits that are scheduled to expire or be phased out.
However, a Shreveport movie industry official says the governor’s proposal doesn’t go far enough.
“We want to make sure Louisiana keeps a competitive edge,” Jindal said. “Extending these existing tax incentives is vital to keeping our economy growing.”
“I don’t think it’s good enough,” said Diego Martinez, president of Shreveport-based Studio Operations, a division of Nu Image/Millennium Films, which has shot nine movies in Shreveport.
“We’re not going to try to match Georgia?” he said, referring to an incentives race between states that has built up steam in recent years.
In May, Georgia enacted its Entertainment Industry Investment Act, which offers movies a credit worth up to 30 percent on production and post-production expenditures. Louisiana’s movie credit is 25 percent.
Georgia also offers a sales tax exemption, worth up to 8 percent, on locally purchased goods.
Industry professionals are worried Louisiana’s incentives, as they stand, put the state at a competitive disadvantage.
“What we need now is a concerted effort by everyone who has a stake in this to figure out what is common ground and push forward,” Martinez said.
Though he’d like to see a stronger proposal from Jindal, Martinez sees the governor’s early interest in the incentives as a positive sign. “The fact that the governor is making a comment on this is a good thing.”
The proposals will cost the state $8 million a year when investors cash in the credits, Jindal said, but the state gains much more from having movies, recordings and video games produced here.
Since the state took the lead in offering movie production tax credits, 40 states are competing with similar credits. In recent years, Louisiana has ranked third in movie production behind California and New York.
The film production industry spent more than $429 million in Louisiana in 2007, resulting in an economic impact of $763 million, reported Economics Research Associates.
The governor wants the Motion Picture Investor Tax Credit incentive to remain at 25 percent for another two years. It is set to drop to 20 percent in July 2010 then to 15 percent in July 2012, where it would remain indefinitely unless the Louisiana Legislature changes it.
Besides extending the credits, the governor proposes tightening some of the requirements but says the changes wouldn't affect the credits’ effectiveness.“It will improve the efficiency of the programs.”Jindal said he wants “several targeted technical improvements made to the existing law by tightening the requirements that are used to certify film production spending, and beginning a ‘Louisiana Entertainment’ branding component for productions receiving the tax credit.”
Georgia’s base tax credit is 20 percent. Another 10 percent credit is available to movie producers if a production company includes a Georgia promotional logo in the qualified finished feature film, TV series, music video or video game project.
Jindal said his proposed changes would “improve the efficiency of the incentive program while allowing the state to take advantage of the marketing opportunity presented because of the large audiences who ultimately view the movies being made in Louisiana.”
Another step is to extend and pare down the Motion Picture Infrastructure Tax Credit so it focuses on “priority investments in film facilities.” Jindal said he would work with the Legislature to target local government priority projects.
The infrastructure credit grants tax breaks for constructing sound stages and other facilities used in filming, such as the huge Louisiana Wave Studio in Shreveport. Lawmakers previously trimmed out a loophole that allowed construction of condominiums and a swimming pool for its guests.
Eliminating a proposed phase-out of the Digital Interactive Media Production Tax Credit, which is aimed at attracting video game development, animation and special effects projects, could draw other companies to the state. The uncertainty is putting future investment on hold, Jindal said.
Entertainment Arts (EA) Sports, the first company to utilize the credit, announced a test facility in Baton Rouge last year.
Jindal also proposes extension of the Sound Recording Investor Tax Credit, a tax break for developers of sound studios and music recording operations.
Also on his list are extending the Research and Development and Angel Investor tax credit programs, the latter of which grants tax breaks for individuals who lend start-up money to new companies. Louisiana-based Nerjyzed Entertainment, which makes black college football video games complete with bands at halftime, is an example of a company that benefited from an angel investor in the program.
Since the state took the lead in offering movie production tax credits, 40 states are competing with similar credits. In recent years, Louisiana has ranked third in movie production behind California and New York.
The film production industry spent more than $429 million in Louisiana in 2007, resulting in an economic impact of $763 million, reported Economics Research Associates.
The film production industry spent more than $429 million in Louisiana in 2007, resulting in an economic impact of $763 million, reported Economics Research Associates.
The governor wants the Motion Picture Investor Tax Credit incentive to remain at 25 percent for another two years. It is set to drop to 20 percent in July 2010 then to 15 percent in July 2012, where it would remain indefinitely unless the Louisiana Legislature changes it.
Besides extending the credits, the governor proposes tightening some of the requirements but says the changes wouldn't affect the credits’ effectiveness.“It will improve the efficiency of the programs.”Jindal said he wants “several targeted technical improvements made to the existing law by tightening the requirements that are used to certify film production spending, and beginning a ‘Louisiana Entertainment’ branding component for productions receiving the tax credit.”
Georgia’s base tax credit is 20 percent. Another 10 percent credit is available to movie producers if a production company includes a Georgia promotional logo in the qualified finished feature film, TV series, music video or video game project.
Jindal said his proposed changes would “improve the efficiency of the incentive program while allowing the state to take advantage of the marketing opportunity presented because of the large audiences who ultimately view the movies being made in Louisiana.”
Another step is to extend and pare down the Motion Picture Infrastructure Tax Credit so it focuses on “priority investments in film facilities.” Jindal said he would work with the Legislature to target local government priority projects.
The infrastructure credit grants tax breaks for constructing sound stages and other facilities used in filming, such as the huge Louisiana Wave Studio in Shreveport. Lawmakers previously trimmed out a loophole that allowed construction of condominiums and a swimming pool for its guests.
Eliminating a proposed phase-out of the Digital Interactive Media Production Tax Credit, which is aimed at attracting video game development, animation and special effects projects, could draw other companies to the state. The uncertainty is putting future investment on hold, Jindal said.
Entertainment Arts (EA) Sports, the first company to utilize the credit, announced a test facility in Baton Rouge last year.
Jindal also proposes extension of the Sound Recording Investor Tax Credit, a tax break for developers of sound studios and music recording operations.
Also on his list are extending the Research and Development and Angel Investor tax credit programs, the latter of which grants tax breaks for individuals who lend start-up money to new companies. Louisiana-based Nerjyzed Entertainment, which makes black college football video games complete with bands at halftime, is an example of a company that benefited from an angel investor in the program.
Article: Shreveporttimes.com
By Mike Hastenmhasten@gannett.comand Alexandyr Kentakent@gannett.com
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