State film committee considers reforms in film tax program

State film committee considers reforms in film tax program

NEW ORLEANS, LA (WVUE) - After a series of scathing media reports, reform is in the air when it comes to film tax credits in Louisiana.

But while some lawmakers are proposing a slate of bills to bring new controls to the industry, others say much of the system is working fine.

On the road to becoming a world film capital, the ride hasn't always been easy.

"Let's try and figure out if people are telling the truth," said state Inspector General Stephen Street.

After media reports, including FOX 8's Lee Zurik series "Easy Money" detailing fraud allegations, state lawmakers began drawing bills to reign it in. And some are now calling for a thorough background check on anyone who benefits from the lucrative credits.

"Many have a trail of tears that they committed fraud before coming here," said state Sen. J.P. Morrell, D-New Orleans.

A special legislative committee of lawmakers and industry leaders proposes addressing everything from mandatory taxes on big stars - whose income taxes now go out of state - to making producers sign affidavits swearing that their accounting is truthful.

"We're still working through some of these points," said state Rep. Julie Stokes, R-Kenner, who is a CPA. She is authoring many of the reform measures, one of which could cap state film tax credits at $300 million.

"The state is in peril with the fiscal crisis, and we need to cut the costs as much as we can," Stokes said.

While many favor tax credit limits as a method to keep state costs predictable, others say it could stand in the way of their growth projections.

Jason Wagganspack has invested $40 million in a Chalmette studio.

"We have concerns in limiting tax credits," he said. "We want to grow."

The committee also proposes limits on the ability to transfer the credits, which some say makes an already confusing accounting process even worse.

"I'm biased on this because I transfer tax credits for a living," said Will French, a film tax dealer.

Some believe the current method of transferring credits has been good for the industry, and they say the committee should focus elsewhere.

"Fraud is actually happening with individuals inflating costs in relating party transactions," said actor and producer Trey Burvant.

The committee is also considering a mandatory Louisiana logo at the opening of any film shot in a state that's basically giving producers $1 for every $3 they spend here.

While considering new controls on film tax credits, lawmakers are also looking to expand some of those credits to people who produce commercials and video-on-demand.

All reform bills are now in draft form and will be filed in the coming weeks in advance of the April legislative session.

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