Louisiana rejected extending the end of the Hollywood tax credit for another couple years on Thursday night.
The House voted 45-37 to defeat Senate Bill 173, which would have kept around two years longer the costly tax benefit many say is the reason why so many filmmakers choose Louisiana to produce their movies and television productions.
Pitched as a way to ensure that movie producers would consider other parts of the state and not just New Orleans for their films, the measure also included postponing the tax credit’s sunset from July 2025 to July 2028.
State Sen. Sharon Hewitt, the Slidell Republican who sponsored SB173, had said previously the extension was necessary because it takes several years before cameras start rolling and the industry is gearing up on a lot film projects after a year of little activity because of the pandemic.
But it was the three-year postponement of the end of the tax credit that caught the attention of House members and ended what had been a fairly smooth ride through the legislative process for the measure.
“There is no impetus to pass this bill today because the bill doesn’t sunset tomorrow,” said Rep. Barry Ivey, R-Central, who added the real issue with the tax break is that 60% of the benefits go to out of state businesses.
Opponents attempted to tack on eight amendments that would have stripped the benefits from the Motion Picture Investor and Infrastructure Tax Credit, which keeps the state from collecting about $180 million per year in taxes.
A series of conservative Republicans lined up to make that point in several ways.
State Rep. Richard Nelson, R-Mandeville, pointed out that giving teachers the full $1,000 annual raise they wanted, which legislators didn’t do this session choosing instead an $800 pay hike, would have cost about a third of the $180 million credited to movie producers each year. “How is that possible?” Nelson said.
Rep. Neil Riser, the Columbia Republican handling the Senate-passed measure, pointed out that it is a credit, meaning the business seeking the tax break had to spend considerably more money before receiving it. Riser can bring SB173 back for another try before Legislature adjourns at 6 p.m. next Thursday, June 10. But for the measure would pass, 25 legislators would need to change their votes.
The film tax credit was set up in 1992, expanded in 2002 and largely revamped in 2017. Under the program now, no more than a $25 million credit is allowed on a single project and no more than $180 million total in taxes can be forgiven in a year. Filmmakers can either subtract the incentive from what they owe Louisiana in taxes or they can sell the credit back to the state and receive a check for 90% of the face value.
For every taxpayer dollar not collected through the film tax credit, the state receives 22-cents-per-dollar return on investment. In 2020, the state gave away $132.8 million in possible tax revenues and received $29.4 million in taxes, according to the Louisiana Department of Economic Development, which calls itself LED.
LED, however, says return-on-investment is a simple calculation that doesn’t adequately reflect the benefits the state receives. The film industry in Louisiana supports more than 10,000 jobs and $800 million in new business sales impacting local businesses in our state. Economists hired by LED calculate it as $6.12 in economic activity for every dollar credited in 2020.
Voting to extend the sunset on film tax credit (45): Reps Adams, Bagley, Brass, Brown, Bryant, Carrier, R. Carter, W. Carter, Cox, Davis, Duplessis, Freeman, Freiberg, Frieman, Gaines, Garofalo, Glover, Hilferty, Hollis, Horton, Hughes, Illg, Jefferson, Jenkins, Jones, Kerner, Lyons, Marino, G. Miller, Moore, Muscarello, Newell, C. Owen, R. Owen, Phelps, Pierre, Riser, Schlegel, Selders, St. Blanc, Stagni, Villio, Wheat, White and Willard.
Voting against SB173 (37): , Speaker Schexnayder, Reps , Amedee, Bourriaque, Coussan, Deshotel, DeVillier, Emerson, Farnum, Firment, Fontenot, Geymann, Goudeau, Harris, Ivey, M. Johnson, LaCombe, Larvadain, Mack, Magee, McCormick, McKnight, McMahen, Miguez, D. Miller, Mincey, Nelson, Orgeron, Pressly, Romero, Schamerhorn, Seabaugh, Stefanski, Tarver, Thomas, Thompson, Turner and Zeringue.
Not voting (23): Reps Bacala, Beaullieu, Bishop, Butler, Carpenter, G. Carter, Cormier, Crews, DuBuisson, Echols, Edmonds, Edmonston, Gadberry, Green, Hodges, Huval, James, T. Johnson, Jordan, Landry, Marcelle, McFarland and Wright.