re: Film Industry a Boon to La!

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One man's welfare is another man's good business environment.

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It is actually a great deal for the movie industry. That's why they are flocking to La.

How many businesses do you know of that get 30% or more back from the state to do business in La?

The question is how can the state justify this massive expenditure, and will it ever end? And what will happen once it does end?

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Example 1.

Movie Company incurs $100,000 in expenses.
30% of $100,000 is $30,000 tax credit.
Movie Company makes a profit of $1,000,000 on movie.
Total state taxes on Movie Company is 8% of $1,000,000 = $80,000
Taxes owed to the state = $80,000 - $30,000 = $50,000.

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Oh they could theoretically do that. Do you really think they can spend $100K on a movie and make $1 million on it?? Show me one example.

What exactly happens is they do not recognize the income of the movie in Louisiana. They sell the production to a company that does. A simple example of this is the super bowl. Several tv shows got 30-35% of their expenses paid while broadcasting here. They sold their advertising from their New York office let's say so there was no taxable income. So they sold their tax credits to other taxpayers who had tax liabilities or they sold them for cash to the state for 85 cents on the dollar.

It is a subsidy.

In your example 2, a more likely scenario (except the minimum is $300,000), the company would simply sell the remaining $26000 in tax credits back to the state at 85 cents on the dollar or they would sell them to you or me or some other taxpayer at whatever we would pay them--certainly we would have to pay more than 85 cents. So you see the state is out at least 85% of 26000 more like it is out $26000.

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100% agree, and I think that is the push everyone should be making. What were the actual dollars SENT OUT from the treasury. I am not being coy when I say those are the relevant numbers and the ones I want to see. Those can then be evaluated vs the additional tax revenues the industry creates. I find it very telling IB runs from trying to get these numbers and relies on the 1.5BB number. That number is completely irrelevant without knowing the numbers I would like to see. If opponents really wanted an answer, they wouldn't run from the actual numbers...they would demand to see them.

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I read the report prepared by Mr. Purpera (the leg. auditor) and it sold me. It's a big loser for the state. I suggest you read his report.

Also I wonder if we can continue the program uncapped, and then what would happen if they start winding down the program. Will all these movie companies leave the state?

At a time when we hear the state is scrubbing the budget, it seems to me to be a program we can't afford. It isn't one time money. We pay for this each and every year.

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I find it quite anal that you refuse to answer my question and are so dense in your thinking that you cannot see how utterly impossible it is that these credits are revenue positive.

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IB. I am in the tax world. It is what I do 100% of the time. No such thing as an impossibility. If you just post the numbers of the checks actually sent an analysis can be done. I also don't like the term "revenue positive". Again...assumption is the state owns all the money. If you feel that way...fine. But don't make your arguments under the guise of protecting the tax payer.

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You are looking for relevant details.

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FIFY

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Your contention that the state writing a check is different than me using a credit to pay taxes it just nuts.

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How so? One means you, a tax payer, send the state less money. The other means the state writes a check. It all depends on whom you believe is entitled to the entirety of the money. You think it's the state. I think its the taxpayer.

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you really have no idea how this works, do you?

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Nope. Just a tax attorney here in LA. Educate me.

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the state doesn't write checks

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and there it is! Thank you.

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state loses 30% of their expenditures in tax revenue they would otherwise receive

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Ahhh....so taxpayers pay less to the state. Horrible result.

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seriously, you just don't understand how this works

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k.

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How so? One means you, a tax payer, send the state less money. The other means the state writes a check. It all depends on whom you believe is entitled to the entirety of the money. You think it's the state. I think its the taxpayer.

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Explain that.

How am I as a taxpayer keeping money if I pay a film maker for a tax credit??? Oh I might save 2 or 3% by buying it from the film maker vs paying the state.

You are advocating that my money and the state's money is the film makers money.

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I am amazed how many alleged conservatives operate under the attitude that the money belongs to the state and they allow taxpayers to keep some of it.....instead of rejoicing that taxpayers are paying less to the state.

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'taxpayers' are not paying less...ONE SPECIFIC INDUSTRY is paying less...which means everyone else will pay more to cover the difference

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Yet you cannot state whether $1.00 was actually sent from the state. This is the disconnect. We will never see eye to eye. You view all money as the governments...we are just allowed to keep some of it. I see it the exact opposite.

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I understand what you are saying, but if the state of La. declares that a certain industry will get tax credits for 30% (or more) of their expenses, and those credits can be sold back to the state or to private individuals or they can be used to lower their own tax liabilities; then the tax credits become valuable to anyone that owes the state taxes.

I see money as being owned by whomever possesses it. It isn't mine unless I have it. It isn't the state's unless they have it.

The money is used by private citizens and by the state to purchase goods and services. Private citizens also use money to pay taxes. If the govt. lowers your tax burden because you possess tax credits then the credits have a value equal to the amount of money you would have had to pay in taxes.

The bottom line is the state is lowering the tax liability of film companies and we need to know exactly why. If the reason is shown that the state is coming out ahead (we are creating jobs, and economic growth equal to or beyond what we are forgiving in taxes) then it should continue. If not, we need to cut it back or cut it out.

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I don't believe you.

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How will I sleep?