THE POST-SIGNAL / Desiray Seaux
Adam Hensgens, center, presented an update on the Louisiana film industry and tax credit to members of the Rotary Club of Crowley Tuesday. Welcoming him were Michael Hensgens and Suzie Webb, president elect.
Rotarians learn of revamped film tax credit
Last year, Louisiana lawmakers reached a film tax deal, signed into effect, by Governor John Bell Edwards.
The film tax credit already in operation was modified to place a long-term spending cap of $180 million per year.
Although a highly arguable tax credit since the state budget is already tight, with funding being cut from higher education, what the tax credit does create is a vehicle for creating numerous jobs throughout the state.
Besides bringing A-list actors to the state, it also gives residents a chance to work with the film crew or production teams.
An additional tax credit of 15 percent for a Louisiana resident payroll credit means, “Compensation for services paid directly to a Louisiana resident shall be eligible for a 15 percent payroll tax credit.”
Adam Hensgens, of Promenade Pictures, son of Michael Hensgens, presented an update to the Crowley Rotarians on Louisiana’s recent revision of film tax credits and the current status of the film industry in the state.
Louisiana has been dubbed “Hollywood of the South” since, in the last 15 years, about $6 billion has been spent in the state by the film industry.
The state, home to 11 studios, once relied on California to come to Louisiana to film.
However, after the film tax was changed in late 2016, it was almost too late as most film production had moved to Atlanta.
So those in the film industry in the state had to get creative. Luckily, online movie giants like Netflix and Hulu are searching for original content to purchase.
By creating smaller budget movies, more productions can be made. More productions equals more jobs as the tax incentive was originally developed to create more jobs in the state.
The niche market is very lucrative as Netflix is currently purchasing original content for twice production cost.
Although “blockbuster” movies are still being made for theaters, fewer and fewer are being made and A-list celebrities are going into smaller-budget films. And the combination of the A-list celebrities and niche products is proving to be a great payoff.
Louisiana is one of 35 states that have a film tax credit, therefore targeting the niche market for the tax credit is ideal.
Louisiana has such diverse geography almost any “scene” can be shot in state.
For example, Crowley’s historic downtown area is being marketed as a great place to film a 1960s Americana-style scene.
For applicants, the Louisiana Tax Credit program provides motion picture productions up to a 40 percent tax credit on total qualified in-state production expenditures including resident and nonresident labor.
The 40 percent maximum credit can be broken down to a 25 percent base credit, 10 percent increase for Louisiana screenplay productions and a 5 percent increase if outside of the New Orleans Metro Statistical Area.
The maximum amount of credits that can be issued is $150 million while the maximum amount of credits that can be claimed is $180 million. The $30 million gap will be used to fill with claims from previous years in which the credits could not be claimed.
The market for film tax credits can not be run by brokers anymore as the credits are no longer transferable.
The modification to the credit states that, in order to claim a film tax credit, one must be named as an investor in a film.
The modified version of the film tax credit is a “much better system of responsibly spending money,” said Hensgens.