Bit Parts

The Court of Appeal of Louisiana, First Circuit, affirmed that a production company continued to qualify for state motion-picture tax credits. Red Stick Studio Development L.L.C. v. State of Louisiana, 2009 CA 1347. Louisiana allowed investor tax credits for productions and their infrastructures. Section '3(C) of Act 456 of the 2007 Regular Session of the Legislature, La. R.S. 47:6007, grandfathered infrastructure projects for which applications for pre-certification or initial certification had been filed by Aug. 1, 2007. Red Stick submitted its application on Feb. 27, 2007. The state then issued an Initial Certification Letter that stated “the applicant shall have until Jan. 1, 2010, to earn tax credits on this project.” Red Stick filed suit, challenging the letter's language, and the trial court ruled for the studio. The Court of Appeal ruled: “We agree with the trial court's determination that the words 'qualify for' as they are used in Section 3(C) mean that an application filed on or before Aug. 1, 2007, must 1) apply for and receive its Initial Certification Letter and 2) spend a minimum of 20[%] or $10 million of the total base investment provided for in the Initial Certification Letter that is unique to film production infrastructure before Jan. 1, 2010. Thereafter, it is qualified to earn 40[%] infrastructure tax credits for the life of the project. The law is to be applied as written with no further interpretation made in search of the intent of the legislature.”