In 2002, the Louisiana Motion Picture Incentive Act was born. The program grants a 10% state tax credit to investors who spend more than $300,000.00 to produce films, TV shows or video productions in Louisiana. The credit grows to 15% if the costs reach eight million dollars or more. Producers also receive credits for hiring local residents as part of their film crew.

In 2003 the legislature further enhanced the LA Film Tax Credit program to allow the producers of films made in Louisiana to sell their credits. This made the incentives even more attractive because most of the production companies were not based in Louisiana, and therefore, did not have large state tax liabilities. The change gave producers a way to easily liquidate the incentives to offset their production costs. It also created a new market for tax credit brokers to buy and sell the tax credits. That's when Stephen Roberts, V.P. of Roberts, Cherry & Co., founded Louisiana Film and Television Credits, LLC.

"When we saw an opportunity to save our clients a significant amount of money we were motivated to be the first tax credit broker in the state to purchase these credits from a major studio", says Roberts." Further, these credits are a great opportunity to lessen the impact caused by the Stelly Plan's tax increases. Also, by purchasing the tax credits early in a year, it can alleviate the need to make estimated tax payments to the State of Louisiana or allow you to stop withholding Louisiana Income Taxes from your salary. This is because the credit will be taken into account when computing the amount of your tax liability on your 2005 Louisiana income tax return."

Last year, Roberts' company bought and sold 18.8 million dollars' worth of film tax credits, resulting in a savings of over 4.5 million dollars in state income taxes for their clients. Some of the credits they originally purchased were for such films as "Runaway Jury" and hugely successful film, "Ray", the life story of the legendary singer, Ray Charles.

How it works:
Individuals with high state income tax liabilities buy tax credits from a broker or investor who has procured them from the production company. Let's assume a taxpayer owes $20,000 in state taxes. They then purchase $20,000 in tax credits for .80 cents on the dollar. The individual pays $16,000 for them, resulting in a savings of $4,000 when it's time to file with the state.

Those who bought into the program early got a chance to save more. Some of the first film tax credits sold for as low as .65 cents on the dollar. However, due to the growing popularity, the ease with which the state accommodates the tax credits, and favorable rulings from the IRS, their price has increased to the .80 - .85 cent range, depending on the number of credits purchased. Despite this slight increase in price, the program still offers substantial savings for the taxpayer.

Providing a tax break for Louisiana residents is only one aspect of the new incentive program. "In addition to the individual savings enjoyed by the taxpayer", says Roberts, "the state stands to profit enormously. By offering these incentives, producers are motivated to select Louisiana as the site for their on location filming, bringing economic development, employment and training to Louisiana residents. These are new dollars coming in. Any tax dollars the state might be losing are substantially outweighed by the business these companies bring and by the infrastructure they are helping to develop."

Roberts estimates that investment in the state's film industry has increased by $180 million dollars since the program began, with projected increases of $300 to $500 million dollars in 2004. Roberts adds that, "That $500 million will stay in Louisiana and stimulate seven times that much in spending and economic growth. It's easy to see why the state is equally committed to working with the taxpayer as well as the producer."

As awareness of the program increases, more and more tax credit brokers, like Roberts, are traveling to Los Angeles and Hollywood to encourage the large studios to bring their films to Louisiana. When asked about his recent trip to Tinseltown to meet with several producers who were considering Louisiana as a possible location for their films, Roberts replied, "They already appreciate our unique culture and diverse geography which they know can be utilized to create almost any setting. The new tax credits make the Bayou State that much more enticing".

For more information about the Louisiana Motion Picture Incentive Act, email info@filmproductioncapital.com or call (866)454-9205.

You can also visit www.filmproductioncapital.com.