Film Tax Credit Changes Make Top Stories of 2015

Posted on December 8th, 2015 by Leonard Alsfeld

Since Louisiana first began offering tax incentives to the film industry in 2002, production in the state has been steadily growing, eventually earning the state the nickname of “Hollywood South.” In 2013, Louisiana surpassed California as the “film production capital of the world” — frequently drawing big budget films and gaining notoriety as the backdrop for Oscar-winning productions including “The Curious Case of Benjamin Button” and “12 Years a Slave.”

Thirteen years into the boom, Hollywood South took its first big hit this year with the passage on June 19 of HB 829. The bill placed the first cap on tax incentives, and one that was much lower than anticipated: $180 million.

Considering that during the most recent fiscal year ending June 2015, Louisiana issued $308 million in credits, the industry was understandably concerned.

While it’s too early to gauge all the effects of the bill, estimates are that while the state may see a decline in large studio projects — which have included big budget action flicks like “Jurassic World,” “Dawn of the Planet of the Apes,” and “Fantastic Four” — smaller independent projects will likely increase.

In the August issue of Biz New Orleans, Leonard Alsfeld, president and CEO of FBT Film, the largest film credit broker in Louisiana, said the cap may prove good for the industry.

“Sixty percent of the credits issued in the last five years were to the big studios: Paramount, Disney, MGM,” he said. “I think that with the cap, those $100 million-plus movies probably won’t be coming back in the next three years, but I don’t read that as a bad thing. Those studios import so much of their work that local workers are often given the lower level jobs, not the high paid jobs we want.”

HB 829 actually provides greater incentives for local workers and projects, including an additional 15 percent credit if a film if a Louisiana company owns or options the project’s copyright for a year, and an additional 15 percent for the use of Louisiana music. The bill also lowers the minimum amount that smaller local filmmakers have to spend on a film to qualify for credits from $300,000 to just $50,000.  

 

Source: bizneworleans.com