From our C’est What file this week, the Louisiana Ethics Board is set to give state lawmakers the full-steam-ahead to begin purchasing film tax credits issued by the Louisiana Motion Picture Tax Incentive Act, a mechanism under the umbrella of the state Department of Economic Development designed to lure movie production companies to Louisiana by granting them tax credits to help offset their production costs. The board is also being advised that lawmakers can purchase tax credits issued by the Louisiana Division of Historic Preservation.
The Ethics Board was asked for an advisory opinion on the issue in April by Senate Secretary Glenn Koepp, and during its meeting Friday in Baton Rouge the board will consider staff attorney Tracy Barker’s opinion that indeed nothing in Louisiana law prevents solons from cashing in on the tax credits.
The Louisiana Motion Picture Tax Incentive Act allows movie production companies to receive the tax credits — they must undergo an application process — and further allows the production companies, according to Barker’s report, to “elect to use the tax credits in three ways: (1) sell the tax credits to the State at 85% of face value; (2) claim the credits on it own tax return at 100% face value; or (3) sell the tax credits to a third party.” The historic-preservation tax credits work in similar fashion.
Barker points out in her report that many “out-of-state production companies have no state income tax liability, therefore the companies monetize these tax credits by using various agents to exchange them for cash.” Now that the Ethics Board is clearing the way for state lawmakers to purchase these tax credits, which they can evidently apply to their own individual and/or business income tax burden, may we wonder whether these lawmakers will have easier more expedited access to the “agents” peddling the credits?
Something just seems a bit “off” about the arrangement. But Barker says otherwise, concluding in her analysis (citing previously referenced state law):
Based on the process and procedures as described by OEID and the State Historic Preservation Office, it does not appear there is any transaction between a purchaser of tax credits (transferee/legislator) and the legislature as prohibited by R.S. 42:1113C. Further, no contracts are entered into with any state agency by the transferee/legislator in purchasing tax credits, thus no violation of R.S. 42:1113D is presented.
Also on Friday at the Ethics Board meeting, the board will consider an advisory opinion by staff attorney Brent Durham finding that a receptionist at the Paul & Lulu University Art Museum in Lafayette who won a pair of American Airlines tickets (to anywhere in the continental U.S.) as a door prize at a luncheon sponsored by the Lafayette Convention & Visitors Commission can accept the tickets. Girl, you go.
To read the advisory opinion on the tax credits (with links to associated documents), click here.