At this point, movies are as much a part of summer as school being out, baseball or the beach. From prehistoric parks to superheroes, and five buddies trying to make it in LA, this is their cinematic time to shine. The film industry has become so synonymous with summer that a few state legislatures have also gotten in on the action.
Faced with a budget deficit befitting the greatest of summer flops, the Louisiana legislature made numerous changes to many of their credits and incentives. The Louisiana film credit, not unlike a building in an action movie, didn’t make it through without some collateral damage.
One of the changes to the credit which has received the greatest attention is the new cap, which will limit the amount of incentives that may be redeemed over the next three years. This change is estimated to save Louisiana roughly $70 million per year, according to an article in The Advocate. There are also new provisions dealing with bad faith holders of the credit, something that has happened far too often in the recent past.
Much like an alien invasion or the first time two characters meet in a romantic comedy, the earth-changing effects of this legislation are immediately evident. Mississippi, for example, has already let it be known that they expect a fair number of productions fleeing Louisiana to set up shop inside of its borders. Even more alarming for the Louisiana film industry is the news that Disney won’t be working on any films in the state as a result of these changes.
If you aren’t a fan of remakes however, there are a few more states putting on a show. Recently, legislation in both Massachusetts and Maryland have ensured that each state’s film credit will keep on trucking into the foreseeable future. While the credit in Alaska has been let go like an actor who can’t get along with his costars.
So whether you enjoy watching the movies or, how states incentivize them, this is the time of year for you.
*Continue the discussion on Bloomberg BNA's State Tax Group on LinkedIn: Are film tax credits a successful way to generate revenue for a state?
For more information about film tax credits, check out Bloomberg BNA’s Credits and Incentives Portfolios by signing up for a free trial of the Bloomberg BNA Premier State Tax Library today.
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