Q & A

Q. What is digital interactive media?
A. In the context of Louisiana’s Digital Interactive Media program, it’s essentially an interactive software
product (e.g. video game, training software, web platform, etc.) that’s built for commercial export, and not
for the producer’s internal use.

Q. What’s a tax credit?
A. A tax credit is a credit that can be used against Louisiana tax liability. In the case of the Digital Interactive
Media program, it is a transferrable credit.

Q. What can I do with the tax credits once I receive them?
A. Firstly, you can cover your Louisiana state tax liability. Since the credits awarded in the Digital Interactive
Media program are transferrable, the remainder of your credits can be sold on the secondary market. Often,
recipients also give the excess credits to investors.

Q. How long are the credits good for?
A. The credits awarded in this program have a ten year “carry-forward”, meaning that they can be redeemed
against Louisiana state tax liability for up to ten years after they’re originally issued. 

Q. Will I need to hire anyone to help me apply for the program?
A. LED’s Office of Entertainment Industry Development has full-time staff whose job it is to help companies
through the process of applying for and receiving the Digital Interactive Media tax credit. We strive to
continually improve the transparency and ease with which firms can apply and enter the program.

Q. Will I need to hire a CPA?
A. Yes, but only at the end of the process. In the 2009 legislative session the program was altered to no
longer require an audit, but instead a cost report performed by a CPA. (for more information on the steps
involved in participating in the program, please see the sections titled “Applying” and “After Application”)

The Incentive 

Q. How much do I receive back in tax credits for what I spend?
A. Digital Interactive Media projects are awarded a 25% tax credit on qualified production expenses, and
labor costs (for Louisiana residents) are awarded an additional 10% (an effective 35% total awarded on labor
costs paid to Louisiana residents).

Q. Can I still get tax credits for hiring out-of-state labor?
A. Any qualified expenditures can receive the tax credit award of 25%, regardless of whether the labor is
performed by Louisiana residents, so long as the work is done in the state of Louisiana. Any work performed
outside of the state would not qualify.

Q. What project expenses costs qualify?
A. The simple answer is costs that are directly related to the project itself. This includes items such as
hardware and software, labor and lease costs- but not for costs associated with running the company
(administrative, clerical, etc.) or marketing the product.

Q. Is there a minimum investment?
A. For the Digital Interactive Media tax credit program, there is no minimum spend required.

Q. Is there a maximum for how many tax credits my project or company can receive?
A. There isn’t a maximum amount of tax credits that a project can earn, nor is there a cap on the program as
a whole.

Q. Can this incentive be used in combination with other LED incentives?
A. LED has many business incentives, and some of which may be combined with the Digital Media credit. A
specific exclusion in the law prohibits a firm to take advantage of both the additional 10% labor credit as well
as LED’s Quality Jobs program for the same monies spent. Other incentives may carry their own “anti-
stacking” clauses, and the various branches of LED can work with your firm to see what all you might be
eligible for.

Q. If I procure my equipment and/or services outside Louisiana, do they count as qualified expenditures?
A. No, all expenditures must be from a source in the state of Louisiana to be applicable. LED can supply a list of in-state vendors that carry the most high-end hardware and software.

Post-Application

Q. Once I’ve applied, what happens?
A. Here’s are the key steps in the process, with more details in the questions below:

1. Submit the application (found here:
2. LED will contact applicant, and discuss any follow-up that’s needed to determine eligibility
3. Once both the project is qualified as eligible and qualified expenses are determined, LED issues a
“Pre-Certification” letter that details guidelines for expenditures for that project.
4. Once the project is completed, applicant then submits the cost report called for in the law to LED
5. Pending review of cost report and final authorization, LED issues a “final certification” letter, which officially issues the tax credit.
6. To redeem the tax credit, by the original applicant or another party, one uses form XXXXX. This is
available from the Louisiana Department of Revenue

Q. When do I receive my tax credits?
A. As above in step #5, tax credits are issued with a project’s final certification.

Q. How do I know if my project has been accepted into the program?
A. As soon as we’ve had a chance to review and clear-up any outstanding issues in the application (which we
strive to complete as quickly as possible), we would then send the applicant a letter of “pre-certification” that
acknowledges a project’s applicable expenditures of those proposed in the application.

Q. When can I transfer the tax credits that I’ve earned?
A. By law, they cannot be sold or otherwise transferred until they are officially issued by LED (in step #5
above).

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