BATON ROUGE — Three bills putting caps on the amount of motion picture tax credits the state will award each year were approved Tuesday by the House Ways and Means Committee.

The committee also approved three measures dealing with Internet sales tax collections. 

Rep. Joel Robideaux, R-Lafayette and committee chairman, has House Bill 829, which would set an annual $226.4 million cap on movie tax credits.

The credits were approved in 2002. They offer motion picture producers income tax credits for 30 percent of production expenses and for 5 percent of payroll costs for Louisiana workers employed on the production. The credit requires the spending of at least $300,000.

Rep. Lance Harris, R-Alexandria, wanted to phase out the tax credits by 2019 in H.B. 276, but his bill was amended to set a $200 million annual cap. Rep. Marcus Hunter, D-Monroe, sponsored the amendment.

The amendment was approved 14-3. The amended measure was then reported favorably without objection.

Rep. Ledricka Thierry, D-Opelousas, has H.B. 704, which would set a $150 million cap.

Rep. Mike Danahay, D-Sulphur and a member of the committee, opposed the Hunter amendment. He said after the meeting that he preferred a cap in the neighborhood of $150 million. He said the credits could be evaluated in subsequent years to determine whether they are productive.

Scores of witnesses addressed the committee, telling members how the movie tax credits have helped establish a growing film industry in the state. Many said it was the magnet that drew them back to Louisiana and encouraged new business development.

Harris said the state has spent $1.2 billion over the last seven years on motion picture tax credits at a time when higher education has been cut by $738 million.

Tax credits have been in effect for 13 years, and the goal was to encourage development of a strong motion picture industry in the state, Harris said.

“We have done that. Is it self-supporting? I don’t know,” Harris said. “Are we going to subsidize it in perpetuity?”

The state has had to do midyear budget cuts every year while it is spending millions on an industry that should be self-supporting, Harris said.

Will French, president of the Louisiana Film Entertainment Association, led off the supporters of the motion picture tax credits. He said the Harris bill would destroy the industry and eliminate 33,000 jobs. 

The film industry is dying in California, he said, because companies are looking for greener pastures. He said the state’s tax credit has reversed the brain drain in Louisiana and is helping grow the economy.

Harris said he finds it difficult to give movie tax credits when the state his closing historical sites and may have to shut down some college campuses because of the $1.6 billion shortfall in next year’s budget.

The Internet sales tax bills would establish criteria in the event Congress approves the collection of taxes for goods sold online. They would require people who meet the definition of a remote dealer under the proposed law to electronically file tax returns and collections to the state. 

The dealer is defined to include people who have certain substantial relationships and similarities with Louisiana retailers or who engage in business in the state through the use of certain affiliated agents.

Danahay said it is anticipated the 8 percent sales taxes — 4 percent state and 4 percent local — would be collected at the state level and then be distributed to local governments.

The many bills sent to the full House on the same subject repeat a process the Ways and Means Committee began Monday. The budget deficit has given legislators the incentive to look at tax credits that are costing the state billions of dollars.

Some 280 bills have been filed dealing with tax credits, exemptions and rebates.

Robideaux urged his members to advance bills to the floor “so that our entire elected body can debate the merits of each possible solution.”

The committee forwarded 14 bills to the full House on Monday. They deal with solar and corporate income tax credits and exemptions and the Enterprise Zone incentives, which encourage business investments in impoverished areas. The goal of the Enterprise Zone measures is to tighten up and reform the program.

Louisiana Legislature

MSgt Toby M. Valadie