In 2013, 18 of the 108 major film studio movies produced were shot here in the Bayou State, which is more than any other U.S. state.
Baton Rouge played host to more than a dozen large-scale film productions over the past year alone, including “Dallas Buyers Club”, “G.I Joe: Retaliation” and “Oblivion”.
So what draws filmmakers to Louisiana? The beautiful natural landscape, the culture and native talent, the low labor costs, or is it something else?
While these things play a part, Louisiana became “Hollywood South” because of Louisiana’s extensive entertainment tax credit programs.
The Louisiana state government provides a 30 percent tax credit for certified entertainment expenditures over $1 million. Meaning if any film production, festival, or concert spends over $1 million in Louisiana, which is common, then the state provides a tax credit for 30 percent of the entertainment’s total qualifying expenditures in the state.
In many instances, this tax credit is more than the company owes in taxes, and the company sells the remaining credit to another group. If Universal Studios receives tax credits of $200,000 filming TV show season in Baton Rouge, Universal Studios may only owe the state $20,000 in taxes, and it could sell its remaining tax credits to another institution of its choosing to receive $180,000.
When many productions cost upwards of $20 million, utilizing this program benefits production companies. In total, the film industry receives 5 percent of Louisiana’s total yearly tax credits.
Film companies are interested in keeping costs low because of recent changes in the industry’s income from distribution because of the rise of digital media platforms, streaming and piracy.
Liza Kelso, Baton Rouge Film Commission executive director, said the tax incentives give film production companies a reason to film in Louisiana, and they, in turn, provide production jobs to locals, use local catering companies and develop infrastructure, which boosts Louisiana’s economy.
“Besides the commerce that is being generated for local vendors and suppliers, there is the fact that our younger creative generation is deciding to stay in Louisiana to make a living in film,” Kelso said.
This 30 percent entertainment tax credit is more than most states offer. The tax incentive programs effectively brought production companies to Louisiana. However, the progam’s benefits have been questioned. One argument is major film production in Louisiana doesn’t necessarily create jobs for residents.
In many cases, film production companies bring staff with them from elsewhere, and few production jobs go to in-state workers . In an attempt to combat this, production companies are offered an extra 5 percent tax credit for payroll expenditures to Louisiana residents.
This doesn’t ensure film production companies will employ Louisiana residents, but it’s an attempt.