At the top of the year, Louisiana Governor Bobby Jindal announced his plans to eliminate personal and corporate income taxes in Louisiana. Governor Jindal is striving to simplify the state’s complex tax code and make it friendlier towards businesses.
Although this tax resolution will put more money back into the pockets of Louisiana residents and business owners, there is great concern about how the proposed cuts will impact Louisiana’s financial structure. Cutting income taxes will mean less funding for state projects, staffing and disaster reserves. Governor Jindal has proposed increasing the sales tax by 1.6% to make up for the shortfall but the increase may not provide sufficient state funding.
The growth of the Louisiana film industry
Within the past decade, Louisiana’s film industry has become one of the most productive in the United States, third to California and New York. Its growth has largely been attributed to the Louisiana Motion Picture Tax Incentive Act enacted in 2002. This generous tax incentive program includes a 30% tax credit on qualified motion picture expenditures with no project or program cap. It has increasingly attracted film and television companies to bring their productions to Louisiana and also to employ local residents.
How will tax cuts in Louisiana affect filmmakers?
If Governor Jinda’s tax cuts are approved, the state may find itself unable to afford providing such a generous tax incentive program for filmmakers. The industry will certainly have its eye on what’s happening politically in Louisiana, in hopes that the state will keep its incentives and maintain its position as a leading hub for entertainment production.