Louisiana Caps Its Film Tax Credit

Louisiana’s governor signed legislation in June reducing the state’s annual film and television production tax-credit cap from $150 million to $125 million, and, more significantly, restructuring the credit’s eligibility criteria in ways that will specifically affect the mid-budget production business the state has depended on.

The reduction is not the largest in recent state-incentive history, but it is the most consequential in 2024 because of Louisiana’s specific position in the American production geography. I want to describe the specific changes, the reasons for them, and what they imply for the broader state-incentive landscape.

What Louisiana’s programme was

Louisiana established its film production tax-credit programme in 2002, making it one of the oldest state-level production incentive structures in the United States. The programme, in its peak form (roughly 2008-2017), offered a 25-40% tax credit on qualifying in-state production expenditures, with specific bonus credits for specific types of expenditure (local hire, rural-parish shooting, post-production services).

At its peak, Louisiana’s programme was the most commercially significant state-incentive in the US outside of California and Georgia. The state hosted major productions including the Jurassic World films, Logan (2017), Interstellar (2014), 12 Years a Slave (2013), and across the television side, True Detective Seasons 1 and 4, True Blood, Queen Sugar, and P-Valley.

The programme’s specific commercial value to Louisiana was estimated at approximately $550 million in direct economic activity in its peak year (2014), supporting approximately 13,000 jobs in the state.

The programme’s problems

The Louisiana programme, like most state-incentive programmes, was built on a specific political assumption: that the incentive paid for itself through downstream economic activity, making the programme effectively free to the state budget. This assumption had become increasingly difficult to defend across the 2010s and 2020s.

Multiple academic studies of state-incentive programmes have concluded that incentives generally return less to state budgets than they cost. The specific accounting is contested (productions do generate specific economic activity; the question is how much of that activity is incremental versus what would have occurred without the incentive), but the general direction of the findings is consistent: state-incentive programmes are not, on balance, budget-positive.

Louisiana’s programme had also accumulated specific political problems. A 2018 audit found that the programme had, across its history, distributed credits to productions that did not fully meet eligibility criteria. A 2020 legislative review found that the programme’s economic-impact studies had been conducted by parties with financial interests in continuing the programme. The credibility of the programme’s cost-benefit case eroded across both audits.

The 2024 changes

The June 2024 legislation made specific changes:

Annual cap reduced from $150 million to $125 million. This is a 17% reduction in the nominal cap. Given inflation, it is effectively a larger real reduction.

Per-project cap introduced. Previously, a single production could receive up to 40% of the programme’s annual cap ($60 million). The new per-project cap is $20 million. Productions requiring credits above this amount must split across multiple tax years or absorb the gap directly.

Qualifying expenditure restrictions tightened. Non-resident above-the-line talent compensation (the salaries of visiting stars, directors, and producers) is now capped at $3 million per project for credit-eligibility purposes. Previously, there was no specific cap on this category.

Post-production requirement added. To qualify for the full credit, productions must complete a specific percentage of post-production (10% minimum) within Louisiana. Previously, post-production could be completed anywhere.

Sunset clause inserted. The programme is now scheduled to expire in 2031 unless specifically renewed by the state legislature. Previously, the programme had no specific expiration.

What the changes mean commercially

The specific combined effect of the changes is to make Louisiana substantially less attractive for large studio productions and slightly less attractive for mid-budget productions.

Large productions ($60 million+ budgets) now hit the per-project cap before they exhaust their eligible expenditures, reducing the effective percentage credit below the nominal rate. Above-the-line talent compensation is no longer fully creditable, which specifically affects productions anchored around expensive stars or directors.

Mid-budget productions ($20-50 million) are less affected by the per-project cap but are affected by the reduction in total annual funding. Productions that previously would have located in Louisiana now face specifically higher probability of being unable to access the credit because the annual cap is exhausted earlier.

Industry reports suggest that approximately 20% of productions that had been actively considering Louisiana for 2025 shoots have reallocated to other states or international locations. The receiving locations include Georgia (which has no annual cap), New Mexico (which expanded its programme in 2023), and Hungary and the Czech Republic on the international side.

The broader trend

Louisiana is not alone. Across 2023 and 2024, several states have reduced or restructured their film-incentive programmes:

Georgia, which had been the single largest state for US film production under its generous uncapped credit programme, is under specific political pressure to cap its programme. Legislative proposals to impose a cap have been introduced in multiple recent sessions, though none have passed as of this writing.

New York restructured its credit in 2023 to exclude specific categories of expenditure and tighten the eligibility requirements.

New Jersey expanded its programme in 2023, partially capturing productions that would have located in Louisiana.

New Mexico expanded its programme in 2023, with specific bonus credits for productions that commit to longer-term presence in the state.

The overall pattern is a specific state-by-state repricing. Some states are reducing incentives. Some are expanding them. The net effect is a redistribution of production activity across the United States, with the specific geographies that dominated in the 2010s losing share to specific newer-incentive states.

What producers are doing

Production companies have, across the last eighteen months, materially increased the attention they pay to state-incentive terms when selecting production locations. The specific administrative requirements of different state programmes, the reliability of credit monetisation (some credits can be sold to third-party corporations; some can only be applied against state tax liability), and the stability of the programmes against political change have all become factors in location selection that were less-weighted five years ago.

For Louisiana specifically, the near-term commercial future is modest but not catastrophic. The state will continue hosting productions at a reduced volume. The specific production-services infrastructure (crew, rental equipment, studio facilities) that has been built across two decades will take time to unwind, even as production volume contracts. Louisiana’s specific commercial position within the exhibition economy will survive, in a reduced form.

For the broader American production landscape, the Louisiana changes are part of a larger-scale reorganisation of where specifically large-budget productions shoot. The 2010s pattern (Georgia and Louisiana dominating for large budgets, California losing share to tax incentives elsewhere) is not the 2025 pattern. Where it settles is not yet clear.

The next major data point will be the Georgia tax-credit legislation, if it eventually passes. Georgia is currently the largest US state for production activity by every meaningful metric. Changes there will have commercial consequences roughly four times the size of the Louisiana changes.

I will be reporting on that when it happens. It may be several years away. The specific political dynamics in Atlanta are moving slowly. But the direction of the Louisiana changes suggests that Georgia, eventually, will follow a similar trajectory.