Section I-1605 - Definitions (Louisiana Code of Regulations)

§ I-1605. Definitions

A. Terms not otherwise defined in this Chapter shall have the same meaning given to them in R.S. 47:6007, unless the context clearly requires otherwise.

B. In this Chapter, the following terms shall have the meanings provided herein, unless the context clearly indicates otherwise.

Allocatee-an individual or entity that received an allocation of investment tax credits.

Allocator-an individual or entity that makes an allocation of investment tax credits.

Base Investment-cash or cash equivalent investment made and used for:

a. production expenditures in the state for a state-certified production;

b. infrastructure expenditures in the state for the development of a state-certified infrastructure project. Infrastructure Expenditures shall include, but are not limited to, expenditures for infrastructure project development, film and television production spaces, post-production equipment, facilities, equipment for distribution companies domiciled within Louisiana, transportation equipment, land acquisition and closing costs, construction costs, design and professional consulting fees associated with the state-certified infrastructure project, furniture, fixtures, equipment, and financing costs. Infrastructure expenditures shall not include indirect costs, any amounts that are later reimbursed by a third party, any costs related to the allocation or transfer of tax credits, any amounts that are paid to persons or entities as a result of their participation in profits from the exploitation of the state-certified Infrastructure Project.

Begin Construction-for projects with applications filed after August 1, 2007, construction of an infrastructure project shall begin when:

a. in the case of a new building, either:

i. materials to be used in the project, worth more than 5 percent of the construction budget, are placed at the project site; or

ii. other work is performed on the site which is visible from a simple inspection and reasonably indicates that the work has begun, such as substantial land fill, soil reinforcement or pouring of a foundation. The following are examples of services which do not indicate that work has begun; services of surveyors or engineers; cutting or removal of trees; demolition of existing structures or clearing of the land surface;

b. in the case of a retrofit project to an existing structure:

i. materials to be used in the project, worth more than 10 percent of the construction budget, are placed at the project site; or

ii. equipment to be used in the project, worth more than 20 percent of the construction budget, is placed and operational at the project site.

Commencement of Production-beginning principal photography or equivalent process.

Commissioner-Commissioner of Administration.

Cost Report of Production Expenditures-a report of production expenditures formatted in accordance with LED accounting guidelines, which may be issued with initial certification, posted on LEDs website or otherwise communicated by LED to applicant in writing.

Department-Louisiana Department of Economic Development, or its successor.

Developer-a person responsible for the development of a state-certification infrastructure project.

Director-Director of the Office of Entertainment Industry Development (the office).

Division-Division of Administration.

Expended in the State-

a. an expenditure to lease immovable property located in the state;

b. an expenditure as compensation for services performed in the state; or

c. an expenditure to purchase or lease tangible personal property within the state where the transaction is subject to the state sales or lease tax provisions of Title 47 of the Louisiana Revised Statutes of 1950:

i. a transaction that is subject to the states sales or lease tax provision of Title 47 of the Louisiana Revised Statutes of 1950 shall include transactions that are also subject to statutory exclusion or exemption.

Expenditure-actual payment of cash or cash equivalent, paid by or on behalf of a state certified production or state-certified infrastructure project, exchanged for goods or services, as evidenced by an invoice, receipt or other such document.

Indirect Costs-costs of operation that are not directly associated with a specific production or infrastructure project, such as clerical salaries, general administrative costs and other overhead charges.

Louisiana Publisher-a company primarily engaged in trade, professional or scholarly publishing, which sells or licenses copyrights or the right of use of copyrights in its ordinary course of business, and has a physical location in Louisiana with at least one full-time employee working at such a location on a regular basis. Registering with the Louisiana Secretary of State or appointing a registered agent in Louisiana does not establish a physical location in Louisiana. A procurement company shall not be considered a Louisiana publisher.

Louisiana Resident-a natural person who is a legal resident, who has been domiciled in and maintained a permanent place of abode in Louisiana for no less than 12 consecutive months, and who has filed a Louisiana state income tax return.

Louisiana Resident, Resident, or Resident of Louisiana- repealed.

a. - b. repealed.

Louisiana Screenplay-

a. a screenplay created by a Louisiana resident; or

b. a screenplay purchased, optioned, licensed or otherwise acquired from a Louisiana publisher, in each case, as evidenced by documents such as certificate of authorship, a WGA registration certificate, the records of the United States Copyright Office, or a reasonable legal opinion issued to the office.

Non-Applicable Production Expenditures -the following expenses are not eligible to earn tax credits:

a. expenditures for marketing and distribution;

b. non-production related overhead;

c. amounts reimbursed by the state or any other governmental entity;

d. costs related to the transfer of tax credits;

e. amounts that are paid to persons or entities as a result of their participation in profits from the exploitation of the production;

f. the application fee;

g. state or local taxes;

h. any other expenditure not allowed by law or regulation.

Office-Office of Entertainment Industry Development.

Payroll -all salary, wages and other compensation, including benefits paid to an employee and taxable in this state. However, payroll for purposes of the additional tax credit for Louisiana-resident payroll shall exclude any portion of an individual salary in excess of one-million dollars.

Person -there are two kinds of persons; natural and juridical.

a. A natural person is a human being.

b. A juridical person is an entity to which the law attributes personality, such as a corporation, partnership or limited liability company.

Procurement Company-any person or entity that purchases, leases or otherwise obtains goods or services from sources outside of the state, for the ultimate use, benefit or enjoyment of a state-certified production company.

Production Expenditures -preproduction, production and postproduction expenditures directly incurred in this state that are directly used in a state-certified production, whether the production company directly contracts or subcontracts such work, including without limitation the following:

a. set construction and operation;

b. wardrobes, make-up, accessories, and related services;

c. costs associated with photography and sound synchronization, lighting, and related services and materials;

d. editing and related services;

e. rental of facilities and equipment;

f. leasing of vehicles;

g. costs of food and lodging;

h. digital or tape editing, film processing, transfer of film to tape or digital format, sound mixing, special and visual effects (if services are performed in Louisiana);

i. total aggregate payroll (limited to the amount of total payroll expended in Louisiana and which is taxable to the recipient in Louisiana. A Louisiana tax return is required to be filed reflecting the amount of compensation paid while the recipient is located in Louisiana. If the recipient is not a Louisiana resident, then a non-resident income tax return should be filed);

j. music, if performed, composed or recorded by a Louisiana resident, or released or published by a Louisiana-domiciled and headquartered company;

k. airfare, if purchased through a;

l. insurance costs or bonding, if purchased through a Louisiana company;

m. payments to a loan-out or personal services corporation for the services of an out-of-state hire are allowed as long as the services are performed in Louisiana on a state certified production;

n. cost of the independent audit.

Production Facility-a physical facility that provides the goods or services necessary for completing the major activities of motion picture production.

Program Issuance Cap-for applications submitted on or after July 1, 2017, the office may issue no more than $150,000,000 in tax credits ("total cap") in any fiscal year, with $7,500,000 reserved for qualified entertainment companies ("QEC cap"), $7,500,000 reserved for Louisiana screenplay productions ("LA screenplay cap"), $15,000,000 reserved for independent film productions ("independent film cap"), with the remaining $120,000,000 available for general allocation to any state certified production ("general cap").

Qualified Louisiana Production Company-an LED-approved motion picture production company, meeting the eligibility criteria for § 1615, Louisiana Screenplay Credit.

Secretary-Secretary of the Department of Economic Development.

Source within the State-a physical facility in Louisiana, operating with posted business hours and employing at least one full-time equivalent employee.

State-Certified Infrastructure Project-shall mean a film, video, television, and digital production and postproduction facility, and movable and immovable property and equipment related thereto, or any other facility which supports and is a necessary component of such proposed state-certified infrastructure project, all as determined and approved by the office, the Secretary of the Department of Economic Development, and the Division of Administration under such terms and conditions as are authorized by this Section. The term infrastructure project shall not include movie theaters or other commercial exhibition facilities.

State-Certified Production-a production approved by the office and the secretary which is produced by a motion picture production company domiciled and headquartered in Louisiana and which has a viable multi-market commercial distribution plan.

Transferee-an individual or entity that receives a transfer of investor tax credits.

Transferor-an individual or entity that makes a transfer of an investor tax credit.

(Promulgated by the Department of Economic Development, Office of Business Development, Office of Entertainment Industry Development and the Office of the Governor, Division of Administration, LR 36:53 (January 2010), Amended by the Department of Economic Development, Office of Business Development, Office of Entertainment Industry Development, LR 43300 (February 2017), Amended by LR 432102 (November 2017).)

AUTHORITY NOTE: Promulgated in accordance with R.S. 47:6007.

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