Louisiana Film Incentive Saved, With $25 Million Cut, in State Budget Deal

Louisiana will preserve its tax incentive for film and TV production, with a $25 million cut, under a budget deal reached by lawmakers.

The state Senate voted 38-1 on Friday to lower the cap on the program from $150 million to $125 million. The House of Representatives concurred on a vote of 90-9, sending the bill to Gov. Jeff Landry for his signature.

Landry called a special session to adopt a sweeping reform to the state’s tax structure, in a bid to reverse a decline in population. The governor’s plan called for lowering corporate and personal income taxes while partially offsetting the cost by eliminating a broad range of exemptions and credits.

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“The goal is to lower the rates, make them flat,” Sen. Franklin Foil said on the Senate floor on Friday. “If we can lower the rates for everyone and treat everyone the same, it will make our state more competitive.”

The House voted last week to approve the tax cut and to eliminate the credit for film and TV production, along with credits for digital media production, historic preservation and other activities.

Louisiana was the first state to adopt a film tax incentive, in 1992, and considerably expanded it a decade later, ultimately earning the moniker “Hollywood South.” The program was capped in 2015, amid a state budget crisis. Georgia, which has no cap, has since surpassed the state as a major production hub.

Officials in Shreveport were adamantly opposed to eliminating the incentive, as Curtis “50 Cent” Jackson is developing G-Unit Studios in the city, with the expectation that productions would be able to leverage the credit.

Film Louisiana, which led the lobbying effort for the incentive, argued that it supports 10,000 jobs and generates $1 billion annually in economic activity. Jason Waggenspack, the president of the group, applauded the governor and the legislators in a statement after the vote on Friday.

“The legislature’s decision in this special session, to maintain the program with adjustments, reaffirms that a strong film industry not only attracts creative talent and investment to Louisiana but also fosters the careers of thousands of local residents, improves local communities, strengthens tourism and amplifies our unique stories on a global stage,” Waggenspack said. “The initial plan to eliminate all but one incentive program could have savaged this lucrative Louisiana investment. The hard work of so many legislators along with the personal testimony and support of hundreds of Louisiana film workers prevailed, and for that we are deeply grateful.”

Hundreds of people from the local film community packed the Capitol on Sunday to save the credit.

The Senate Revenue and Fiscal Affairs Committee backed off on Tuesday, voting to keep the film credit while cutting it to $125 million. The incentive to rehabilitate historic buildings was also restored, though its cap was lowered from $125 million to $85 million.

At the same hearing, the committee voted to eliminate refundability of all tax credits — meaning a taxpayer could not get cash back if their credits exceed their state income tax liability. Since most entertainment companies are headquartered outside the state and have limited in-state tax liability, that would have significantly hamstrung the film credit.

Foil, the chair of the Revenue and Fiscal Affairs Committee, withdrew that provision on Friday, allowing the credits to remain refundable. He said he would revisit the issue in the next legislative session.

The current program allows the state to issue up to $150 million per year in film credits, and allows producers to redeem up to $180 million. If either cap is not reached, the remainder rolls over to the following year. The bill approved Friday cuts both caps to $125 million, and eliminates the rollover of unused credits.

The Senate voted to cut the corporate income tax — which currently has multiple brackets reaching as high as 7.5% — to a flat 5.5% rate. It also voted to impose sales tax on streaming subscriptions and other “digital goods,” which is expected to raise about $40 million.

Georgia considered capping its program during last year’s legislative session, but reversed course after industry pushback.

Other states are moving to create new programs or increase existing ones. Arizona voted in 2022 to create a $125 million film program, while Nevada is considering a $100 million proposal to subsidize a new soundstage facility in Las Vegas. New York increased its incentive in 2023 to $700 million, and California Gov. Gavin Newsom called last month for an increase to $750 million.