Film tax credits get scrutiny as abuse is exposed

Written by: Rob Masson


With the state facing a $1.8 billion budget deficit, tax credits are about to get a hard look, especially film tax credits.

“We’re always concerned when we have programs that are abused by people in the process,” said state Rep. J.P. Morrell

Louisiana has become a film capital, thanks to lucrative tax credits, but as outlined in this week’s Lee Zurik investigation, those credits are often abused.

Now, two state lawmakers are attempting to tighten things up with a special emphasis on improving audits.

Julie Stokes is a CPA who also serves as a representative from Kenner.

“What we’re doing is based on making sure the fraud is eliminated in the program,” Stokes said.

Stokes is proposing new laws, that would require trained auditors to make sure that numbers aren’t inflated to provide producers with unjustifiable paydays.

“One of the ideas that someone brought to me is making the inspector general’s office available for forensic audits,” she said.

“Obviously it’s important that we look at the current auditing function and make sure when we are talking about audits, that we give LED the power to do its own audits,” Morrell said.

They are also talking about beefing up the state film office to provide more oversight.

“They want to know that they’re doing the best job they can, and they’re given adequate resources to make sure their tax dollars aren’t misspent,” Morrell said.

Stokes says the 30 percent credit might be more worthwhile if filmmakers put a graphic promoting Louisiana on each movie before the credits.

“In Georgia, they require an advertising component,” Stokes said.

But even if the new legislation reigns in millions of dollars in wasteful film tax credits, lawmakers say there are bigger challenges ahead.

When you talk about a $1.8 billion apocalypse budget, film is not the panacea to fix it,” Morrell said.

Morrell says the state needs to take a holistic approach and reign in a wide range of tax credits, but for now, the production credit is the focus.

“The program has been successful, but there’s more we can do to make it more transparent,” Morrell said.

And he wants to help push reforms, before opponents attempt to do away with the credits altogether.

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