Incentive Categories

Musical and Theatrical Production Tax Incentive

Whether you’re launching a national concert tour, staging a new theatrical production or even buying and restoring a performance venue, we’ll help you hit your mark. Louisiana offers a robust 25% to 35% tax incentive for musical and theatrical productions and qualified infrastructure projects.

Provides a 10% tax credit for certified Louisiana expenditures between $100,000 and $300,000
Provides a 20% tax credit for certified Louisiana expenditures between $300,000 and $1,000,000
Provides a 25% tax credit for certified Louisiana expenditures over $1,000,000
Provides an additional 10% tax credit for payroll expenditures to Louisiana residents
No cap on production expenditures
Provides an additional credit (available until December 31, 2012) for the shipping and transporting of tangible property to be used in a state-certified production
The tax credit is refundable or transferrable
Additional incentives are available when collaborating with Louisiana’s educational institutions

Eligibility

Louisiana’s musical and theatrical production income tax credit program is open to concert, theatrical and other live productions that originate in the State of Louisiana. The musical and theatrical production income tax credit for infrastructure projects is available to new and existing facilities whose primary commercial use is hosting musical and theatrical productions. There is a $100,000 minimum in-state expenditure requirement.

Qualifying productions include:

Pre-Broadway engagement or remounts
Tour or resident production remounts
Pre-Broadway tryouts
Resident or regional productions
National touring companies producing their first public performance in Louisiana
Concert tours producing their first public performance in Louisiana

Eligible production expenditures:

Salaries directly related to the development of in-state certified productions
Physical production costs directly related to an in-state certified production
Artist compensation directly related to performance days in Louisiana
Creative team compensation directly related to work performed in Louisiana
Local and touring crew compensation directly related to work performed in Louisiana
Hotel and airfare expenditures directly related to an in-state certified production
Venue rental and associated fixed costs

Qualifying infrastructure projects include:

Construction and renovation of new or existing proscenium theaters and performing arts facilities with fixed seating
Facilities whose primary commercial use is hosting musical and theatrical productions

Eligible infrastructure expenditures:

Land and acquisition costs
Construction costs
Design fees
Furniture, fixtures and equipment purchased subject to sale agreement or capital lease

Non-eligible infrastructure projects:

Non proscenium performance venues with nonfixed or modular seating arrangements
A facility that regularly sells food and beverages when musical and theatrical productions are not taking place
A facility with a residential or retail component

Getting Started

To take advantage of the Musical and Theatrical Production Income Tax Credit, review the process and download the Live Performance application.

Next Steps

Initial Certification (60-90 business days)

1. Complete and submit the application and supporting documents in their entirety to Louisiana Entertainment.

2. Once the application is complete, the project is evaluated for eligibility.

3. If Louisiana Entertainment determines that the project meets eligibility requirements of the statute and program rules, Louisiana Entertainment issues an Initial Certification letter for that project.

4. The applicant signs the Initial Certification letter and returns it to Louisiana Entertainment.

Final Certification (60-90 business days)

1. Upon completion of the project, the applicant must submit an agreed-upon procedures report, prepared by an independent Louisiana CPA, to Louisiana Entertainment. View agreed upon procedures report guidelines.

2. In addition to the audit report, the following information may be requested:

Full general ledger(s) – any and all data detailing expenditures (in-state and out-of-state) related to the production
Full payroll data – any and all data related to payroll associated with the production
Invoices, contracts and proof of payment for certain transactions may be required by LED
Verification of Louisiana payroll expenditures may be subject to review of Declaration of Residency form(s) by CPA

3. After all supporting documentation is received and approved, Louisiana Entertainment issues a Final Certification letter, confirming the certified amount that was spent in state and the certified amount of tax credits the applicant will receive.

Issuance of Credits (30-45 business days)

1. Upon Final Certification, Louisiana Entertainment submits the Final Certification letter to the Louisiana Department of Revenue (LDR) on behalf of the investor who earned the musical and theatrical production income tax credits.

2. LDR may require the investor to submit additional information.

3. LDR issues tax credits to investor.

Eligibility Scenarios

Q. The Rolling Stones and The Lion King are launching their North American tours in Louisiana. Would these productions qualify for the Musical and Theatrical Production Income Tax Credit?
A. YES. Pre-production, running costs and artist guarantees would qualify for tax credits. Only expenditures relating to production activity in Louisiana would qualify for tax credits, and any expenditures relating to out-of-state production activity would be disallowed.

Q. New Orleans is a stop on the North American tours of both the Rolling Stones and The Lion King. Would these productions qualify for the Musical and Theatrical Production Income Tax Credit?
A. NO. Neither of these productions would fulfill the statutory requirement that productions originate in Louisiana.

Q. I have purchased an old historic theater in Louisiana that has been out of use for some time. Would this project qualify for the infrastructure incentive program and would the cost of purchasing as well as renovating the theater qualify?
A. YES on both fronts. There are limitations to certain expenditures that are detailed in the program rules.

Q. I’m thinking about opening a venue that serves lunch, has a great happy hour and features bands a few nights a week with a cover charge at the door. Would this project qualify for infrastructure credits?
A. NO. Any facility whose primary commercial use is determined to be of a nature other than hosting musical or theatrical productions would be considered non qualifying.

FAQs

Frequently Asked Questions related to the Musical and Theatrical Production Tax Credit.

Q. How does the program define a qualified musical or theatrical production?
A. Louisiana’s Musical and Theatrical Production Incentive Program is open to concert, theatrical and other live productions that originate in the State of Louisiana.

Q. Do not-for-profit organizations qualify for the program?
A. Yes. Although it is necessary to establish taxable liability with the State of Louisiana, it is not necessary to owe taxes. Not-for-profit organizations are issued credits in the form of a "refund of overpayment" by the Louisiana Department of Revenue.

Q. What is a tax credit?
A. A tax credit is a credit that can be used against Louisiana tax liability. In the case of the musical and theatrical production income tax credits, the credits are refundable or transferrable.

Q. How much can I receive in musical and theatrical production income tax credits?
A. You can receive up to 35% of your qualified Louisiana expenditures as refundable or transferrable tax credits.

Q. What can I do with these tax credits?
A. Musical and theatrical production income tax credits are refundable or transferrable.

Q. Will I need to hire a CPA?
A. Yes.

Q. Can I get tax credits for payroll of out-of-state residents?
A. Any qualified expenditures can receive the tax credit award up to 25%, regardless of whether the labor is performed by Louisiana residents, as long as the work is performed in the State of Louisiana. All labor must be verified to have been performed in Louisiana, and any work performed outside of the state would not qualify.

Q. Is there a minimum investment?
A. The minimum investment is $100,000 in Louisiana on the project(s) for which the application is made.

Q. What is the maximum amount in tax credits my project can receive?
A. There are no per-project or program caps on musical and theatrical production income tax credits. Musical and theatrical production infrastructure income tax credits are capped at $10 million per project with a $60 million annual state cap.

Q. Can this incentive be used in combination with other LED incentives?
A. LED has many business incentives, some of which may be combined with the musical and theatrical production income tax credit. Claiming identical expenditures for more than one LED incentive program is prohibited.

Q. Is there an application fee?
A. Yes. The fee is assessed as 0.2% of 25% of your estimated expenditures in Louisiana with a $200 minimum fee and $5,000 maximum fee. Make check or money order payable to Louisiana Economic Development. No cash is accepted. The fee is non-refundable.

Q. When will I know if my project qualifies?
A. As soon as we have had a chance to review and clear up any outstanding issues in the application (which we strive to complete as quickly as possible), we issue an Initial Certification that acknowledges a project’s applicable expenditures based on those proposed in the application. The Initial Certification is not a tax credit; rather, it is a certification that the project is qualified to potentially earn tax credits.

Q. When do I receive my tax credits?
A. Tax credits are issued following a project’s Final Certification.

The Process

Complete the application form online.
If approved, LED issues Initial Certification letter.
Track production project's expenses.
Submit agreed upon Procedures Report performed by independent CPA to LED.
If approved, LED issues Final Certification for the amount of the tax.
Claim 100 percent credit refund on Louisiana tax return or make a one-time transfer on the open market.