Louisiana Economic Development


&
 

Esplanade Studios

Sound Recording Investor Tax Credit

The Sound Recording Investor Tax Credit provides a 18% tax credit for sound recording projects made in the State of Louisiana. Louisiana also offers some of the world's finest talent and great recording studios to complement the attractive financial benefits of recording in state. Sound recording investor tax credits are issued as rebates.

  • Provides a 18% tax credit on sound recording expenses
     
  • Program is subject to a cap of $ 2.16 million in tax credits per calendar year

 

The Sound Recording Investor Tax Credit Process

  • 1. Complete the application form online and submit expenditure verification report deposit.
  • 2. If approved, Office of Entertainment Industry Development (OEID) issues an "Initial Certification".
  • 3. An expenditure report is performed by an independent CPA assigned by OEID.
  • 4. Submit a CPA-Certified Project Cost Report to LED.
  • 5. If approved, OEID issues Final Certification for the amount of the tax credit.
  • 6. The Louisiana Department of Revenue issues a rebate check.

 

Eligibility

The program incentivizes sound recording, defined as a recording of music, poetry or spoken-word performance made in Louisiana and produced in Louisiana in whole or in part. A
$ 15,000 minimum in expenditures is required.


Qualifying Sound Recordings Include

  • Recording, tracking and overdubbing of music and vocal performances
  • Recording of film scores
  • Recording of spoken word performance
  • Recording of live musical performances

 

Eligible Expenditures

  • Studio rental fees and associated fixed costs
  • Artist and musician salaries directly related to a certified recording project
  • Producer fees directly related to a certified recording project
  • Mixing and mastering of a recording made in whole or in part in the State of Louisiana
  • Instrument and equipment rental
  • Hotel, airfare (when booked through a Louisiana Travel Agent), and catering expenditures directly related to a certified recording project

 

Non-Eligible Expenditures

  • Mixing, mastering or any post-production expenditures for projects not originally recorded in Louisiana are considered non qualifying
  • Producer fees in excess of 20% of the entire project budget are considered non-qualifying
  • Studio rental fees may be limited if they are found to be in excess of fair market value
  • Expenditures associated with related party transactions may be limited as detailed in cost report guidelines
  • All costs associated with duplication, packaging, marketing and distribution are non-qualifying

 

Program Rules

 

Getting Started
Complete the Louisiana Economic Development Application form and print it ...
 

 

Next Steps

Initial Certification (60 - 90 Business Days)

  • 1. Complete and submit the application and fee in its entirety to OEID. Projects under $50,000 are not subject to an application fee.
  • 2. Once the application is complete, the project is evaluated for eligibility. Applicants to the sound recording production program must provide detailed accounting and verification of expenditures relating to All-In Producer Deals. Please refer to the producer fee policy notice.
  • 3. Prior to the issuance of the initial certification letter, an expenditure verification report deposit shall be submitted accordingly to the following schedule.
  • Production Size

     

    Deposit Amount

    $ 10,000.00 - $ 24,999.99    $ 750.00
     
    $ 25,000.00 - $ 49,999.99    $ 1,500.00
     
    $ 50,000.00 - $ 99,999.99    $ 2,500.00
     
    $ 100,000.00 & Above   $ 3,750.00

  • 4
    . If OEID determines that the project meets eligibility requirements of the statute and program rules, OEID issues an Initial Certification for that project or QMC.  The applicant signs the Initial Certification letter and returns it to OEID.

 

Final Certification (60 - 90 Business Days)

  • 1. Upon project completion, the applicant must submit to OEID a cost report prepared by an independent CPA assigned by OEID to perform the cost report.
  • 2. Upon receiving the cost report/audit, OEID reviews the report and may request additional supporting documentation.
  • 3. After all supporting documentation is received and approved, OEID issues a Final Certification letter, confirming the certified amount that was spent in state and the certified amount of the tax credit the applicant will receive as a rebate.

 

Issuance of Tax Credit (30 - 45 Business Days)

  • 1. Upon Final Certification, OEID submits the Final Certification letter to the Louisiana Department of Revenue (LDR) on behalf of the investor who earned the tax credit.
  • 2. LDR may require the investor to submit additional information.
  • 3. LDR issues tax credit to investor as a rebate.

 

Eligibility Scenarios

 
  • Q: The Rolling Stones are recording a new album in London, New York and New Orleans. Does this project qualify?
  • A: Partially. The expenditures made in Louisiana would qualify, but the expenditures made in London and New York would not.
  • Q: The Rolling Stones recorded a new album in London and New York and are spending a month in New Orleans mixing and mastering the album. Does this project qualify?
  • A: NO. Mixing and mastering costs only qualify if the work is performed on a recording originally made in Louisiana.
  • Q: I am considering building a new recording studio in Louisiana. Does the sound recording investor tax credit apply to my project?
  • A: NO.

 

Frequently Asked Questions

Q: How does this benefit my recording studio?
A: If you are a studio owner, you can market the tax credit as an incentive for talent to come to Louisiana or stay in Louisiana to record their album. They will get the tax credit, but you will get the business because the talent can get a 18% return on their investment.

Q: What is the monetary value of the tax credit?
A: The tax credit is 18% of the base investment and is issued as a rebate. A rebate is a direct payment to the applicant from the Louisiana Department of Revenue. It is not necessary to establish taxable liability with Louisiana Department of Revenue to receive the rebate, but an applicant must have a Louisiana Tax ID in order to receive the rebate.

Q: What is considered as base investment for the purposes of computing the tax credit?
A: Base investment is money spent in Louisiana that is directly related to the sound recording production project.

Q: What does and does not qualify for the sound recording investor tax credit?
A: The only expenses that will qualify for the tax credit are those that are directly related to the production of a sound recording. For a production, qualifying expenses include, but are not limited to: travel (if purchased through a Louisiana travel agent), studio rental and fees, producer fee, composer fee, musicians' fees, and any other costs directly related to production. Non-qualifying expenses include, but are not limited to: distribution, marketing, promotion, advertising, expenses incurred but not paid, expenses paid to a business that is not located in the State of Louisiana, and any costs not directly related to the production.

Q: What is a distribution plan?
A: A distribution plan will illustrate how an applicant plans to distribute a sound recording once it is finished. The distribution plan needs to be as detailed as possible. Will it go on sale at stores, over the Internet, through a distribution company, etc.?

Q: What is a preliminary budget?
A: The preliminary budget should outline the anticipated sound recording production expenditures for the project.

Q: What is a complete application?
A: A complete application is one that is filled out entirely with all supporting documentation and requested information and is submitted to OEID. Only complete applications will be able to proceed with the certification process.

Q: What is the maximum tax credit amount my project can receive? 
A: 
$ 100,000.00

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 sound recording investor tax credit. Claiming identical expenditures for more than one LED incentive program is prohibited.

Q: I started spending money in Louisiana before I received an Initial Certification. Can I still claim what I have spent?
A: YES. As long as a company can claim their first expenditure on a project 12 months prior to the date their project is approved (initially certified) for the program.

Q: Is there an application fee?
A: YES. Effective July 1, 2015, an application fee of 0.005 x proposed tax benefit will be assessed to an applicant. The minimum fee is $ 500.00 and the maximum fee is $15,000.00. Projects under $50,000.00 are not subject to the fee.

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.

Q: When do I receive my tax credit?
A: Tax credits are issued as rebates following a project's Final Certification.

Program Administration

Phillip Mann
Director

Live Performance
& Music Industry Development
 

E-Mail: philip.mann@la.gov  |  Phone: 225.342.5403

Lacy McRight
Assistant Director

Music & Live Performance
 

E-Mail: lacey.mcright@la.gov  |  Phone: 225.342.5403