A committee of the Louisiana Senate voted on Tuesday to retain the state’s tax incentive for film production, while reducing the cap on the program from $150 million to $125 million.
Last week, the state House of Representatives voted to terminate the incentive effective June 30, 2025, as part of a sweeping tax reform package. In response, hundreds of people jammed the hallways of the state Capitol in Baton Rouge on Sunday to protest the move, which would threaten thousands of film jobs.
On Tuesday, the Senate Revenue and Fiscal Affairs Committee backed off, voting to keep the film credit in place while cutting the cap, starting next year.
State Sen. Sam Jenkins, D-Shreveport, applauded the move, along with a similar move to keep a tax incentive for rehabilitation of historic buildings.
“Both of these credits in my opinion have shown they are wise investments,” Jenkins said.
But the final legislative outcome was still to be determined. The Senate committee also adopted amendments that would eliminate refundability of all tax credits — meaning that taxpayers could no longer get cash back for credits that exceed their state income tax liability — a potentially significant issue if it were included in the final bill.
“For projects that apply on or after January 1, 2025, motion picture tax credits may not be transferred to the Department of Revenue and shall be only utilized to offset income tax on a return,” the amendment states.
The current program allows producers to redeem up to $180 million in credits per year. If producers do not have enough tax liability, they can sell the credits back to the Department of Revenue at a 10% discount.
The state issues no more than $150 million each year. Under the committee amendments, both caps would be lowered to $125 million.
Film Louisiana, which has led the industry’s lobbying effort, indicated Tuesday that more work remains to be done.
“Today’s committee actions are just part of the legislative process,” said Jason Waggenspack, president of the organization. “While we wish everything could be resolved quickly, that’s not how legislation happens. We are confident our state is committed to keeping the film industry in Louisiana, and we’re optimistic for a resolution by the end of this week.”
Under current law, if producers claim less than the cap in any given year, the balance rolls over to the following year. The amendment approved Tuesday disallows that rollover, further restricting the credit. Nevertheless, lawmakers generally expressed support for the program.
“There is a strong appetite that we need to keep the industry,” said Rep. Emily Chenevert, a Republican from Baton Rouge, in an interview on Friday. “When people are looking to shoot, we want them to know we are open for business.”
The committee also voted to retain a tax credit for rehabilitation of historic buildings, while cutting the program from $125 million to $85 million.
Gov. Jeff Landry called a special session of the Legislature last month to lower state income taxes, with the aim of making the state more attractive to businesses. The governor proposed reducing personal income taxes to 3% and cutting the corporate income tax — which goes as high as 7.5% — to a flat 5.5% rate.
In order to offset the lost revenue, the governor proposed eliminating some 200 tax exemptions and credits and charging sales taxes on goods and services that are currently untaxed. The tax cuts have proved popular among lawmakers, but many of the offsets have been controversial.
To pay for the extra cost of retaining the film and historic preservation credits, the committee voted for a 6% corporate tax rate, rather than a 5.5% rate.
Curtis “50 Cent” Jackson is developing a film studio in Shreveport, with the expectation that the state film credit will help spur production. The Shreveport City Council passed a resolution two weeks ago urging the state Legislature to retain the credits for filming and for preservation of historic buildings.
Film Louisiana has repeatedly said that it supports pro-business tax reform. But it has also argued that the film credit supports 10,000 jobs and has led to $1 billion in economic activity per year.
Correction: This story initially stated that an amendment to set the corporate rate at 6% was rejected. The committee approved the amendment. The story also stated that an amendment allowed a rollover if the film credit cap was not reached. The rollover was disallowed.
