The heady mix of brand-spanking-new facilities, skilled local talent, and budget-friendly tax breaks makes a compelling case for moving your production to LA (Louisiana that is).
It may be the worst kept secret in Hollywood. Louisiana is now the third most popular region of the country for movie productions, after Los Angeles and New York. A total of 53 major productions were completed in 2007, including theatrical features, movie-of-the-week projects and television pilots. The state’s Office of Entertainment Industry Development estimates that $500 million from motion picture production budgets was spent in Louisiana during 2007. “There has been a 5,000-percent growth rate since 2002,” explains Sherri McConnell, entertainment industry director for Louisiana Economic Development.
Why the rush to move productions to Louisiana? It can’t be just the food and culture. The main reason is the state’s aggressive tax credits that lower the bottom line in production and infrastructure costs. “It’s the elephant in the room,” says Kevin Murphy, director of studio operations for Raleigh Studios Baton Rouge. “You can’t ignore the fact it’s a vital ingredient.”
The tax incentives are substantial. “On the infrastructure side, you’re talking 40 percent,” says McConnell. “It’s basically 40 percent off your in-state expenses.” Infrastructure includes studio facilities you build in the state. In addition, if you base your production in the state, you can receive a 25-percent tax credit that’s applied to your in-state expenses exceeding $300,000. And for that portion of the expenses that go for Louisiana residents hired for the production, you can take another 10 percent off your taxes.”
Imagine 40, 35 or 25 cents back in your pocket for each dollar spent. That’s a big advantage for independent projects, as well as Hollywood blockbusters. And it’s real money, not just a carryover credit for your tax return. “If you don’t have a Louisiana state tax liability, or you want to monetize it, you can transfer it, which means you can sell it,” explains McConnell.