§ 47:6022 — Digital interactive media and software tax credit

Louisiana § 47:6022

• Jurisdiction: Louisiana
• Title 47: Revenue and Taxation

Text

§6022. Digital interactive media and software tax credit
A. Short title. This Section shall be known and may be referred to as the "Louisiana
Digital Media and Software Act".
B. Purpose. The primary objective of this Section is to encourage development in
Louisiana of a strong capital base for the production of digital interactive media products and
platforms in order to achieve a more independent, self-supporting industry. This objective
is divided into immediate and long-term objectives as follows:
(1) Immediate objectives are to:
(a) Attract private investment for the production of digital interactive media products
and platforms in this state.
(b) Develop a tax infrastructure which encourages private investment. This
infrastructure will provide for state participation in the form of tax credits to encourage
investment in state-certified productions.
(c) Develop a tax infrastructure utilizing tax credits which encourage investments
in multiple state-certified productions.
(2) Long-term objectives are to:
(a) Encourage increased employment opportunities within this sector and increased
competition with other states in fully developing economic development options within
digital interactive media products and platforms.
(b) Encourage new education curricula in order to provide a labor force trained in
all aspects of digital interactive media.
(c) Encourage partnerships between digital interactive media developers and
Louisiana educational institutions.
C. Definitions. For the purposes of this Section:
(1) "Base investment" means the actual funds expended in Louisiana by a
state-certified production as production-related costs for design or development of digital
interactive media, including costs for payroll and component parts, as defined in this Section.
(2) "Company" means an entity authorized to do business in the state of Louisiana
and engaged in the business of producing digital interactive media as defined in this Section.
"Company" shall not mean or include any company owned, affiliated, or controlled, in whole
or in part, by any company or person subject to any of the following:
(a) Has a contract or application with Louisiana Economic Development that is in
default or noncompliance.
(b) Is in default on a loan made by the state or a loan guaranteed by the state.
(c) Has ever declared bankruptcy under which an obligation of the company or
person to pay or repay public funds or monies was discharged as a part of such bankruptcy.
(3) "Component parts", with respect to digital interactive media, means all elements
that are integral to the functioning or development of such products and platforms. Some
examples of "component parts" are software, computer code, image files, music files, audio
files, video files, scripts and plays, concept mock-ups, software tools, and testing procedures.
Component parts shall also include, but not be limited to computer servers, workstations,
server racks, hard drives, optical drives, monitors, keyboards, integrated video and audio
equipment, networking routers, switches, network cabling, and any other computer-related
hardware necessary to create or operate a digital interactive media product or platform.
(4) "Department" means Louisiana Economic Development.
(5)(a) "Digital interactive media" means products or platforms that are intended for
commercial production, use, or distribution; that contain at least two of the following types
of data: text, sound, fixed images, animated images, video, or 3D geometry; and that have
all of the following three characteristics:
(i) "Digital" means a system that uses discrete (discontinuous) values ordinarily
symbolized numerically to represent information for input, processing, transmission, and
storage. A digital system would be contrasted with an "analog" system which uses a
continuous range of values to represent information. The term "digital" includes, but is not
limited to information input, processed, transmitted and stored via the Internet.
(ii) "Interactive" means a digital media system for inputting, processing, transmitting,
or storing information or data in which users of the system are able to respond to the digital
media system by inputting, transmitting, processing, or storing information or data in
response to the information or data provided to them through the digital media system.
"Digital media system" means communications delivered via electronic energy where the
information stored, transmitted, or received is in digital form.
(iii) "Media" means communication tools used to store, transmit, distribute, and
deliver information and data. The term "media" includes methods and mechanisms for
information distribution through, but not limited to distributed networks, such as the Internet,
and through compact disc, CD-ROM, various types of DVD, and other removable storage
drives and devices.
(b) Some examples of digital interactive media are:
(i) Video or interactive games.
(ii) Simulation software.
(iii) Interactive educational or training products.
(iv) Internet sites designed and developed as social media.
(v) Software applications that provide connectivity and communications between
mobile devices and digital interactive media web platforms.
(vi) Technology designed to stream live or pre-recorded video content over the
Internet to large simultaneous audiences.
(c) "Digital interactive media" shall not include:
(i) Software development designed and developed primarily for internal or
operational purposes of the company.
(ii) Largely static Internet sites designed to provide information about a person,
business, company, or firm.
(iii) Products regulated under the Louisiana Gaming Control Law.
(6) "Expended in Louisiana" means an expenditure to lease immovable property
located within the state; an expenditure as compensation for services performed in the state;
or an expenditure to purchase or lease tangible personal property within the state where the
transaction is subject to the state sales or lease tax provisions of Title 47 of the Louisiana
Revised Statutes of 1950. A transaction that is subject to the state sales or lease tax
provisions of Title 47 of the Louisiana Revised Statutes of 1950 shall include transactions
which are also subject to a statutory exclusion or exemption.
(7) Repealed by Acts 2025, No. 432, §3.
(8) "Payroll" includes all salary, wages, and other compensation sourced or
apportioned to Louisiana, including related benefits.
(9) "Person" means a natural person, corporation, partnership, limited partnership,
limited liability company, joint venture, trust, estate, or association.
(10)(a) "Production expenses" means preproduction and production expenditures in
the state directly relating to a state-certified production including without limitation the
following: testing software, source code development, patches, updates, sprites, three-dimensional models, and level design; costs associated with photography and sound
synchronization, lighting and related services; rental of Louisiana facilities and equipment;
purchase of prepackaged audio files, video files, photographic, or libraries; purchase of
licenses to use pre-recorded audio files, video, or photographic files; development costs
associated with producing audio files and video files to be used in the production of the end
product under development.
(b) "Production expenses" shall not include any of the following:
(i) Expenditures for or related to marketing, promotion and distribution.
(ii) Administrative, payroll, and management services which are not directly related
to management of the state-certified production.
(iii) Food, entertainment, and lodging expenses.
(iv) Amounts that are later reimbursed by the state.
(v) Costs related to the transfer of tax credits.
(vi) Amounts that are paid to persons or entities as a result of their participation in
profits from the exploitation of the production.
(vii) Any application fee, expense verification report fee, or state or local taxes.
(11) "Resident" or "resident of Louisiana" means a natural person and, for the
purpose of determining eligibility for the tax incentives provided by this Section, any person
domiciled in the state of Louisiana and any other person who maintains a permanent place
of abode within the state and spends in the aggregate more than six months of each year
within the state.
(12) "Secretary" means the secretary of Louisiana Economic Development.
(13) "State-certified production" shall mean a digital interactive media production
or a component part thereof approved by the office.
(14) "Tax credit" means the digital interactive media and software development tax
credit authorized by this Section.
D. Tax credit; specific projects.
(1) For applications for state-certified productions submitted to the office prior to
July 1, 2009, and subsequently approved by the office and secretary, there is hereby
authorized a tax credit against state income tax which shall be earned by producers at the
time funds are expended in Louisiana on a state-certified production as follows:
(a) For each of the first and second years following certification of the project as a
state-certified production, the producer shall earn tax credits at the rate of twenty percent of
the base investment for that year.
(b) For each of the third and fourth years following certification of the project as a
state-certified production, the producer shall earn tax credits at the rate of fifteen percent of
the base investment for that year.
(c) For each of the fifth and sixth years following certification of the project as a
state-certified production, the producer shall earn tax credits at the rate of ten percent of the
base investment for that year.
(d) No tax credits may be earned under this Section after the sixth year following the
certification of the project as a state-certified production.
(2) For applications for state-certified productions submitted to the office on or after
July 1, 2009, and before July 1, 2015, and subsequently approved by the office and secretary,
there are hereby authorized tax credits which shall be earned by a company at the time funds
are expended in Louisiana on a state-certified production as follows:
(a) Credits shall be earned at the rate of twenty-five percent of the base investment.
(b) To the extent that base investment is expended on payroll for Louisiana residents
employed in connection with a state-certified production, additional tax credits shall be
earned at the rate of ten percent of the payroll.
(3) For applications for state-certified productions submitted to the office on or after
July 1, 2015, and before July 1, 2017, and subsequently approved by the office and secretary,
there are hereby authorized tax credits that shall be earned by a company at the time funds
are expended in Louisiana on a state-certified production as follows:
(a) Credits shall be earned at the rate of eighteen percent of the base investment.
(b) To the extent that base investment is expended on payroll for Louisiana residents
employed in connection with a state-certified production, additional tax credits shall be
earned at the rate of seven and two tenths of one percent of the payroll.
(4) For applications for state-certified productions submitted to the office on or after
July 1, 2017, and subsequently approved by the office and secretary, there are hereby
authorized tax credits that shall be earned by a company at the time funds are expended in
Louisiana on a state-certified production as follows:
(a) Credits shall be earned at the rate of eighteen percent of the base investment.
(b) To the extent that base investment is expended on payroll for Louisiana residents
employed in connection with a state-certified production, additional tax credits shall be
earned at the rate of seven percent of the payroll.
E. Use of tax credits. (1) For tax credits earned for expenditures made on or before
December 31, 2011:
(a) The credit shall be allowed against the income tax due from a taxpayer for the
taxable period in which the credit is earned as well as the immediately preceding period. If
the tax credit allowed pursuant to this Section exceeds the amount of taxes due from a
taxpayer, then any unused credit may be carried forward by the taxpayer as a credit against
subsequent tax liability for a period not to exceed ten years. However, in no event shall the
amount of the tax credit applied by a taxpayer in a taxable period exceed the amount of taxes
due from the taxpayer for that taxable period.
(b) All entities taxed as corporations for Louisiana income tax purposes shall claim
any credit on their corporation income tax return.
(c) Individuals, estates, and trusts shall claim their share of any credit on their
income tax return.
(d) Entities not taxed as corporations shall claim their share of any credit on the
returns of the partners or members as follows:
(i) Corporate partners or members shall claim their share of any credit on their
corporation income tax returns.
(ii) Individual partners or members shall claim their share of any credit on their
individual income tax returns.
(iii) Partners or members that are estates or trusts shall claim their share of any credit
on their fiduciary income tax returns.
(e) Any tax credits allocated to a person and not previously claimed by any taxpayer
against his Louisiana state income tax may be transferred or sold by the person to another
person, subject to the following conditions:
(i) A single transfer or sale may involve one or more transferees. The transferee of
the tax credits may transfer or sell such tax credits subject to the conditions of this Section.
(ii) Transferors and transferees shall submit to the Department of Revenue, in
writing, a notification of any transfer or sale of tax credits within ten business days after the
transfer or sale of such tax credits. The notification shall include the transferor's tax credit
balance prior to transfer, the state-certified production number, the name of the state-certified
production, the transferor's remaining tax credit balance after transfer, all tax identification
numbers for both transferor and transferee, the date of transfer, the amount transferred, a
copy of the tax credit certificate, and any other information required by the office or the
Department of Revenue.
(iii) Failure to comply with this Paragraph will result in the disallowance of the tax
credit until the taxpayers are in full compliance.
(iv) The transfer or sale of this credit does not extend the time in which the credit can
be used. The carryforward period for credit that is transferred or sold begins on the date on
which the credit was originally earned.
(v) The transferee shall apply such credits in the same manner and against the same
taxes as the taxpayer originally awarded the credit.
(2) For tax credits earned for expenditures made on or after January 1, 2012:
(a) The tax credits shall be refundable and allowed against the individual or
corporate income tax liability of the companies or financiers of the project in accordance
with their share of the credit as provided for in the application for certification for the project.
The credit shall be allowed for the taxable period in which expenditures eligible for a credit
are expended as set forth in the final tax credit certification letter. Any excess of the credit
over the income tax liability against which the credit may be applied shall constitute an
overpayment, as defined in R.S. 47:1621(A), and the secretary of the Department of Revenue
shall make a refund of such overpayment from the current collections of the taxes imposed
by Chapter 1 of Subtitle II of this Title, as amended. The right to a refund of any such
overpayment shall not be subject to the requirements of R.S. 47:1621(B).
(b) At the time of final certification of tax credits, a company may elect, on a one-time basis, to receive a rebate of the credits. The amount of the rebate shall be eighty-five
percent of the face value of the credits. Upon receipt of the final tax credit certification letter
and any necessary additional information, the secretary of the Department of Revenue shall
make payment to the company, or its irrevocable designee, which may include but not be
limited to a bank or other lender, in the amount to which he is entitled from the current
collections of the taxes collected pursuant to Chapter 1 of Subtitle II of this Title, as
amended.
F. Administration. (1) The office may promulgate rules in accordance with the
Administrative Procedure Act to establish the policies and program elements regarding
project qualifications of state-certified productions and any other matter necessary to carry
out the intent and purposes of this Section. Such rules shall be subject to oversight by the
House Committee on Ways and Means and the Senate Committee on Revenue and Fiscal
Affairs.
(2) Application. A company seeking to participate in the tax credit program shall
apply to the department through an application process established by the department.
(i) The office shall directly engage and assign a certified public accountant to
perform an expense verification report on an applicant's cost report of production expenses.
The applicant shall be responsible for payment of the expense verification report fee in
accordance with R.S. 36:104.1, and shall make all records related to the tax credit application
available to the accountant.
(ii) The applicant will be assessed the office's actual cost for the expense verification
report fee. The maximum fee for the report shall be fifteen thousand dollars for verification
of a cost report reflecting production expenses of up to one million dollars, and the
maximum fee shall be twenty-five thousand dollars for verification of a cost report reflecting
production expenses in excess of one million dollars.
(iii) At the time of application, the applicant shall submit to the office a deposit of
the expenditure verification report fee of seven thousand five hundred dollars for a
production with qualified production expenses projected to be no more than one million
dollars, and a deposit of fifteen thousand dollars for those projected to be in excess of one
million dollars.
(3) Certification. (a) The office shall review the company's application and any
other information which it deems appropriate for determination of the project's eligibility for
initial certification. For a project deemed eligible, the office shall provide an initial
certification of the project as a state-certified production to the company and to the secretary
of the Department of Revenue. The initial certification shall be effective for expenditures
made no more than six months prior to the date of initial certification and shall be valid until
the project is completed. The initial certification shall include a unique identifying number
for each state-certified production.
(b) Upon project completion or no more than once annually, the applicant shall make
a request to the office to proceed to final certification by submitting to the office a cost report
of production expenses to be formatted in accordance with instructions of the office. The
applicant shall make all records related to the cost report available for inspection by the
office and the certified public accountant selected by the office to prepare the expense
verification report on the cost report of production expenses. After review and investigation
of the cost report, the accountant shall submit to the office an expense verification report.
The office may request additional expense verification reports for any additional cost reports
for production expenses, the cost of which shall be borne by the company.
(c) Digital interactive media and software tax credits shall be certified only upon the
receipt and approval by the office of an expense verification report submitted by a certified
public accountant in accordance with the provisions of Subparagraph (b) of this Paragraph.
The office shall review the expense verification report, and for those expenses found to be
qualified by the department shall issue a final tax credit certification letter to the company.
The certification letter shall include the identifying number assigned to that state-certified
production in the initial certification.
(d) As a condition for receiving certification of tax credits under this Section, state-certified productions may be required to display the state brand or logo, or both, as prescribed
by the secretary.
G. Recapture of credits . If the office finds that funds for which a company received
credits according to this Section are not actually expended in Louisiana as a production-related cost of a state-certified production, then the company's state income tax for such
taxable period shall be increased by such amount necessary for the recapture of credit
provided by this Section.
H. Recovery of credits by Department of Revenue. (1) Credits previously granted
to a taxpayer, but later disallowed, may be recovered by the secretary of the Department of
Revenue through any collection remedy authorized by R.S. 47:1561 and initiated within three
years from December thirty-first of the year in which the credits were earned.
(2) The only interest that may be assessed and collected on recovered credits is
interest at a rate of three percentage points above the rate provided in R.S. 9:3500(B)(1),
which shall be computed from the original due date of the return on which the credit was
taken.
(3) The provisions of this Subsection are in addition to and shall not limit the
authority of the secretary of the Department of Revenue to assess or to collect under any
other provision of law.
I. The provisions of this Section shall not apply to any investments or expenditures
that qualify for tax credits under R.S. 47:6007.
J. A taxpayer shall not receive any other incentive administered by Louisiana
Economic Development for any expenditures for which the taxpayer has received a tax credit
or tax rebate under this Section.
K. Repealed by Acts 2011, No. 415, §3, eff. July 11, 2011.
L. Repealed by Acts 2024, 3rd Ex. Sess., No. 5, §3, eff. Jan. 1, 2025.
NOTE: See Acts 2016, 1 st Ex. Sess., No. 29, §2, regarding effectiveness.
NOTE: See Acts 2024, 3 rd Ex. Sess., No. 5, §4, regarding applicability to franchise
tax periods beginning on or after Jan. 1, 2026.

Legislative History

Acts 2005, No. 346, §1, eff. June 30, 2005; Acts 2009, No. 454, §1, eff. July 1, 2009; Acts 2011, No. 415, §§1, 3, eff. July 11, 2011; Acts 2013, No. 418, §1, eff. June 21, 2013; Acts 2015, No. 125, §2, eff. July 1, 2015; Acts 2015, No. 357, §1, eff. June 29, 2015; Acts 2015, No. 412, §2, special eff. date, See Act; Acts 2016, 1 st Ex. Sess., No. 29, §2; Acts 2017, No. 400, §§1, 2, and 4, eff. June 26, 2017; Acts 2024, 3rd Ex. Sess., No. 5, §3, eff. Jan. 1, 2025; Acts 2024, 3rd Ex. Sess., No. 6, §1, eff. Jan. 1, 2026; Acts 2025, No. 432, §3.