It is no secret that major productions can bolster economies, revitalize neighborhoods, and transform communities. Different parts of the country often compete to attract major film and television players, and the tax credit is one of the most critical tools in a government’s arsenal to attract businesses. Louisiana recently made news by imposing an annual $180 million cap. This number is significantly lower than what Louisiana (sometimes called “Hollywood South”) usually certifies. Previously, the state annually allowed for $250-270 million. Louisiana’s Film Entertainment Association is considering legal action as a result.
The film industry’s presence in places like North Carolina and Michigan clearly indicate that when tax credits are diminished, jobs tend to follow as filmmakers flock to other locations that eagerly offer greater opportunities for cost abatements. As State Representative Henry Burns of Shreveport told local media, ““There are other states out there stretching their arms, wanting to welcome our film industry in there. And just that uncertainty sometimes will cause people to leave.” The state of Georgia, in particular, has long been a competitor who will likely see an increase in film-related activity as a result.
Movie makers and lawmakers alike are hoping to revisit the film credits debate next January with a new governor. Until that time, the greatest concern is that film credits already in the system may not be redeemable under the cap. Should that the case, then the cap might well be unlawful. That issue will be also be subject to further legislation.
Until these issues are more fully explored, all the remains to be seen is if the state can retain its proud tradition as a regional powerhouse when it comes to film production.