Q. What is the minimum threshold to qualify?
A. $300,000 in Louisiana expenditures, $50,000 for local Louisiana productions meeting certain requirements.
Q. What qualifies for credit?
A. Only expenditures made for tangible goods and services directly related to the state-certified production within the borders of the State of Louisiana. That includes production payroll for residents and non-residents alike, as long as it is for work performed in Louisiana.
Q. What qualifies for the additional 10% payroll tax credit?
A. To the extent that base investment is expended on payroll for Louisiana residents employed in connection with a state-certified production, each investor shall be allowed an additional tax credit of 10% for Louisiana resident payroll. The additional 10% credit is only allowed on the first $3 million of a resident's payroll. Any amount above that shall be eligible for the 30% credit only. It must be expended on a natural person (not a loan-out) in order to qualify for the additional 10%.
Q. How do I know if something is a Louisiana spend?
A. Services will qualify if performed in Louisiana. Goods will qualify if purchased through a source in Louisiana.
Q. What is a source within the state?
A. A source is a physical nexus with at least one full-time employee and posted business hours.
Q. I'm a Louisiana taxpayer and I earned these tax credits. Can I use the tax credit to offset my personal income tax liabilities?
Q. I'm a Louisiana corporation and subject to corporate income taxes. Can I use the tax credit to offset my corporate income tax liabilities?
Q. I've earned this tax credit and have no Louisiana income tax liabilities. Can I transfer the credit?
A. Yes. The credits are fully transferable.
Q. I've earned this tax credit and I cannot find anyone to transfer this credit to in Louisiana. What do I do?
A. You can opt to transfer the credit to the Louisiana Department of Revenue, who will then issue you a check for 85% of the face value of the credits. In other words, for $1 worth of credits, the State will issue you a check for $0.85; buy back suspended from July 1, 2015 to July 1, 2016.
Q. Must a certain percentage of crew be Louisiana residents?
A. No. However, Louisiana has a skilled and deep crew base and expenditures made on hiring Louisiana residents increases the potential tax credits that can be earned.
Q. Are fuel purchases eligible for tax credits?
A. Yes. However, any taxes charged by the State or any local governing entity in Louisiana are ineligible and must be removed from qualifying expenditures. These amounts are subject to verification by the CPA.
Q. Do fringes qualify?
Q. Are payments made to loan-out companies subject to the $3 million salary limitation?
Q. Are per diems eligible?
Q. Are finance fees eligible?
A. No, unless paid to certain Louisiana companies, in which case fees may be allocated on a pro rate basis based on production activity occurring in and out of state.
Q. How is a Louisiana resident defined?
A. A legal resident who has been domiciled in the state of Louisiana for more than 12 consecutive months of each year within the state is considered a Louisiana resident. The resident must sign a declaration of residency and provide supporting documentation for the production.
Q. My spending in Louisiana started before receiving Initial Certification. Can some of these expenditures still be claimed?
A. The initial certification covers expenditures made 12 months prior and 24 months after the date of initial certification.
Q. What is the going rate for tax credits on the open market?
A. Tax credits usually sell between 80 and 90 cents on the dollar on the open market. Also, you can transfer the credits to the State for 85 cents on the dollar; however, the state buy back is suspended from July 1, 2015 to July 1, 2016.
Q. What if I have not secured distribution yet?
A. We only require that there be a commercial multi-market distribution plan, not a distribution agreement in place.
Q. What if I take a Louisiana crew to another state?
A. That is certainly permissible; however, credits can only be issued for the work performed directly in Louisiana.