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Digital Interactive Media and Software Program

Louisiana’s Digital Interactive Media and Software Program, statutorily known as Digital Interactive Media and Software Tax Credit — the strongest of its kind in the nation — is helping innovative digital media and software development companies of all sizes gain a competitive edge.

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Provides a 25% tax credit on qualified payroll for in-state labor and 18% for qualified production expenditures.

No cap and no minimum requirement.

Tax credit can be applied to state income tax liability and the state will refund any overages OR applicants can opt for 85% of the value earned as a rebate any time during the year.

Provides a 25% tax credit on qualified payroll for in-state labor and 18% for qualified production expenditures.

No cap and no minimum requirement.

Tax credit can be applied to state income tax liability and the state will refund any overages OR applicants can opt for 85% of the value earned as a rebate any time during the year.

Eligibility

The incentive is open to all companies producing digital interactive media products or platforms in Louisiana. Certain exclusions apply, such as static internet websites or software primarily designed for internal use, which are non-qualifying. Only work physically performed in Louisiana and only direct development equipment purchased through Louisiana businesses qualifies for the incentive.

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Qualifying development products include:

  • Digital Media and Games
  • Web-based and Mobile Applications
  • Consumer Software
  • Entertainment Software
  • Business and Enterprise Software
  • Interactive Devices and Consoles
  • Embedded Systems

What qualifies as a Louisiana business?

  • Registered with the Secretary of State
  • Physically located in Louisiana
  • Posted hours of business
  • At least one full-time employee

Note: Eligible expenditures may start as early as, or no later than, six months from initial certification date (acceptance into the program) — R.S. 47:6022.

Eligible Labor Expenses

  • Project Managers
  • Quality Assurance
  • Engineers
  • Programmers
  • Game Designers
  • Industrial Designers
  • Composers
  • Artists
  • Management R&D/Engineering

Eligible Production Expenses

  • Production equipment directly related to development (Hardware/Software)
  • Allocated rent for where direct development occurs
  • Office supplies (related to development)
  • Licenses/permits for development

Non-Eligible Labor Expenses

  • Customer Service Staff
  • Business Development/Sales Staff
  • Assistants/Secretaries
  • Marketing/PR Staff
  • Accounting/Financial Staff
  • Clerical Staff
  • Installation Staff
  • Janitorial/Maintenance Staff
  • Human Resources
  • Miscellaneous Administrative/Payroll
  • Manufacturing Staff

Non-Eligible Production Expenses

  • Furniture and fixtures
  • Relocation expenditures
  • Domain license fees
  • Hosting
  • Payroll processing fees
  • Indirect production equipment (Hardware/Software)
  • Entertainment expenditures
  • Communications (telephone, cell phone, etc.)
  • Utilities
  • State/local taxes
  • Advertisements
  • General insurance for business operations
  • Interest paid on loans
  • Auto rental/mileage
  • Parking/fare expenditures
  • Travel expenditures
  • Internet
  • Food
  • Recruiting/hiring expenditures
  • Manufacturing expenditures
  • Lodging/housing of staff

Eligibility Scenarios

NO. The initial certification letter shall be effective for qualifying expenditures no earlier than six months from date of application. Qualifying expenditures can only begin six months from the date of initial certification.

Content including image files, music files and video files may be eligible expenditures in the development stage up to the commercial release of the product; however, updates to content after the commercial release of the product are non-eligible expenditures.

NO. Eligible equipment includes equipment that is used entirely for the development of the product. Equipment used to distribute the product is considered non-eligible equipment because it is considered outside the development stage.

The Process

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1

Getting Started

Apply online using FastLane and submit application fee and verification report fee.

2

If approved, the Office of Entertainment Industry Development (OEID) issues Initial Certification.

3

Track project software development expenses.

4

An expenditure report is performed by an independent CPA assigned by OEID.

5

If approved, OEID issues Final Certification for the amount of the tax credit.

6

Claim credit on Louisiana tax return and receive a refund, or at time of final certification opt to receive 85% rebate check option.

1

Getting Started

Apply online using FastLane and submit application fee and verification report fee.

2

If approved, the Office of Entertainment Industry Development (OEID) issues Initial Certification.

3

Track project software development expenses.

4

An expenditure report is performed by an independent CPA assigned by OEID.

5

If approved, OEID issues Final Certification for the amount of the tax credit.

6

Claim credit on Louisiana tax return and receive a refund, or at time of final certification opt to receive 85% rebate check option.

Certifications

  1. The applicant submits an application, fee, production verification report deposit and preliminary budget to OEID. The preliminary budget should describe all the expenditures related to the development of the project. 
    The application fee is calculated at 0.005 x proposed tax benefit with a minimum fee of $500 and a maximum fee of $15,000.Prior to issuance of initial certification, the applicant shall submit to the office a deposit of the expenditure verification report fee of $7,500 for a production with qualified production expenses projected to be no more than $1 million, and a deposit of $15,000 for those projected to be in excess of $1 million.
    The applicant will be assessed the actual cost for the expense verification report fee. The maximum fee for the report shall be $15,000 for verification of a cost report reflecting production expenses of up to $1 million dollars, and the maximum fee shall be $25,000 for verification of a cost report reflecting production expenses in excess of $1 million.
  2. The application, fee and preliminary budget are received by OEID, and the applicant is notified via email that both were received.
  3. The application and preliminary budget are reviewed for completeness, and the applicant is then sent a standard list of compliance questions.
  4. The application, preliminary budget and compliance questions are reviewed by OEID staff. Applicant will be contacted to discuss any follow-up that’s needed to determine eligibility.
  5. Once approved, an initial certification letter is sent to the applicant.
  1. Company notifies OEID that they are ready to proceed to certification of credits. (This step occurs after actual expenditures occur and at a time frame determined by the applicant — upon project completion, or no more than once per calendar year.)
  2. OEID shall assign the CPA to perform the cost report review and provide a report to OEID and the applicant.
  3. Documents are then reviewed by OEID staff and additional documentation may be requested at this step.
  4. Once approved by the Director of Digital Media, the tax credit certification is then issued to the applicant.
  5. Applicant can claim the tax credit to offset any state income tax liability and the state will refund any overages OR applicants can opt to transfer the credit to the state at 85%. In order to receive a refund of any overpayment of taxes due, LDR can provide additional guidance.

Digital Interactive Media and Software Program FAQs

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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.

NO. It is an incentive that awards state tax credits to producers of Digital Interactive Media.

A tax credit is a credit that can be used against Louisiana tax liability. In the case of the Digital Interactive Media program, it’s a credit with an option for an 85% rebate.

Firstly, you can cover your Louisiana state tax liability. Since the credits awarded in the Digital Interactive Media Program are refundable, the remainder of the credits are considered an overpayment and refunded to the applicant by the Department of Revenue. There is also an option to take the value of the credits as a one-time rebate (any time during the year) at 85% of their original value.

OEID has full-time staff members 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.