Allies of the film industry in the Louisiana Legislature said Wednesday they will work to salvage the state’s production incentive, after the House voted to repeal it this week.
The state House of Representatives voted on Tuesday to sunset the $150 million program on June 30, 2025, as part of a tax reform package that lowers the state personal income tax to 3%.
The House voted again on Wednesday, 79-19, to pass a corporate tax cut. Both bills — HB 1 and HB 2 — include the phaseout of tax credits for the film industry, as well as for historic preservation and other activities.
But after blowback from the local film community on Tuesday, several legislators said on the House floor that they will work with the state senate and the governor’s office to preserve an incentive for entertainment.
“There’s a lot of panic about what we’re doing here,” said Rep. Steven Jackson, a Democrat from Shreveport, where Curtis “50 Cent” Jackson has invested in a new production facility. “My concern with this bill is it sends a message we don’t want to do film.”
Gov. Jeff Landry, a Republican, called a special session last month to enact a major overhaul of the state’s tax system. The governor’s allies want to eliminate more than 200 credits and exemptions, and use the money to lower income tax rates across the board.
The state is moving to lower its corporate rate — which is the highest in the South — as it seeks to spur economic growth.
“We have to get to a point where we’re more competitive to attract business so we stop losing our people,” said Rep. Julie Emerson, the Republican chair of the Ways and Means Committee. “We’re the only state in the South that’s losing population.”
The reform package also includes sales tax increases, such as a 4% tax on streaming subscriptions — including Netflix and Disney+ — that is projected to raise $40 million a year. Netflix declined to comment on the measure, which passed the House on a vote of 80-19 on Wednesday.
Louisiana was the first state to pass a film tax credit, and became known about 15 years ago as “Hollywood South” for the volume of production that flocked to the state. Georgia has since surpassed the state as the South’s dominant production hub, with an incentive topping $1 billion, while California and New York have expanded their own credit programs to try to retain their industries.
Louisiana capped credit redemptions at $180 million in 2015, due to budget constraints, and later limited credit issuance to $150 million a year. But the state still has a significant crew base and production infrastructure. About 16,000 people worked on film crews in the state in 2022, according to Film Louisiana.
Some industry allies warned that without the credit, production would likely go elsewhere.
“The movie industry has thrived in our state,” said Rep. Michael Bayham, a Republican from St. Bernard Parish, who noted that “Deepwater Horizon” and “Terminator 3” had been filmed in his district. “Let’s do our part to help our existing businesses remain competitive with other states in the South.”
Industry advocates argue that every dollar in tax incentives creates $6 in economic activity. The Department of Revenue has found a lower economic return, however, and concludes the program is a net drain on the state’s coffers.
Emerson argued Wednesday that the film incentive amounts to a subsidy of one industry by all the others. Another lawmaker noted that much of the money ends up in California. Rep. Danny McCormick, a Republican from Oil City, said the program is “corporate welfare” for entertainment companies.
“If they’re such great, successful businesses, why do I have to give them taxpayer money?” he asked. “You would have to be a bloomin’ idiot to take $180 million of somebody else’s money and not be able to create some jobs.”
Though the House voted overwhelmingly to eliminate the film credit, some in the majority said they hoped the Senate would take a different approach.
Rep. Emily Chenevert, a Republican from Baton Rouge, said that talks were underway to modify the legislation to help retain the industry.
“The governor, I believe, sees the impact of this industry,” said Chenevert, who worked as a line producer and production manager before running for office. “I am confident today we will get to an agreement that helps to sustain the industry and helps to keep us competitive… This is not just about those in Hollywood. This is about the local communities and the businesses it touches.”
The state economic development office has previously said that it will propose more limited incentives next year, which would not be targeted at any particular industry.
“If the decision is made to change the current tax incentives, we are confident the resulting business-friendly tax structure will benefit the film industry,” Film Louisiana said in a statement Wednesday. “It represents $1 billion a year and impacts citizens, towns and cities that legislators deeply value and want to see succeed.”
