How could a Louisiana motion-picture infrastructure company earn, hold, allocate, transfer, and apply the former 40% infrastructure credit?

Plain-English summary

The Louisiana company could claim a credit equal to 40% of certified base investment exceeding $300,000, then hold, allocate, or transfer unused credits within the original 10-year carryforward period.

Economic Development and the Entertainment Office controlled project certification and qualifying expenditures. Revenue accepted their certified credits and limited its own recapture actions to specified excess-credit, fraud, material-misrepresentation, or agency-request circumstances.

Certification and credit amount

The project had a pre-certification letter as a state-certified infrastructure project. After auditor reports, the agencies would issue tax-credit certification letters identifying earned credits.

Revenue ruled that Company A could claim 40% of base investment spent on the certified project. Revenue declined to decide whether Company A was a motion picture production company, referring that classification to Economic Development.

Recapture and audit limits

Revenue agreed not to recapture agency-certified expenditures unless Economic Development and the Entertainment Office approved or requested recapture, the claimant exceeded the certified amount, or fraud or material misrepresentation occurred.

An excess or fraud-based action was directed against the person responsible rather than automatically against every transferor or transferee.

Holding, allocation, and transfer

The operating agreement could keep credits at Company A until a later year. A noncorporate-taxed entity could allocate credits to members, including new or substituted members, in percentages disproportionate to capital, profits, losses, cash distributions, voting rights, or management rights.

The ruling accepted those Louisiana allocations regardless of whether analogous federal credit allocations would satisfy IRC §§ 704(b) and 752. An entity taxed as a corporation could not use the member-allocation route but could transfer eligible unused credits.

Credits could be transferred only if not previously claimed. A transferee received no better right than the transferor possessed.

Carryforward and later participants

The 10-year carryforward began with the first day of the year after the credit was originally earned, or the allowed date for a structured infrastructure credit. Holding or transferring the credit later did not restart that period.

Credits could be allocated or transferred in later years to persons who were not members when the credits were earned, and could offset a tax year in which the credit was originally usable or a later year within the carryforward.

Return-extension situations

The ruling allowed a purchaser with a timely return extension and a written credit-purchase agreement in place when payment was due to use acquired credits on the extended return under the detailed conditions stated. Depending on whether tax had already been paid, this could produce a refund or avoid interest and penalty to the extent sufficient credits were acquired before filing.

Other key points

• Louisiana tax liability was not required merely to hold, allocate, or transfer the credit.
• A nonresident individual or an entity organized, domiciled, or headquartered outside Louisiana could acquire and use the credit against an eligible Louisiana liability.
• Transfer notice could use the certification letter containing the project's unique identification number.
• Revenue required documentation similar to Revenue Information Bulletin 05-001.

Common questions

Q: Did Revenue itself decide what project expenditures qualified?

A: No. It accepted the certification agencies' determinations.

Q: Could the company allocate credits to members years after earning them?

A: Yes, within the original carryforward and under an eligible noncorporate entity's operating agreement.

Q: Did a transfer restart the 10-year period?

A: No.

Q: Could a transferee use credit the transferor did not own or could not use?

A: No.

Citations and references

• La. R.S. 47:6007 — former motion picture infrastructure credit, certification, transfer, carryforward, and recapture provisions
• La. R.S. 47:1675(B) — ordering of credits discussed in the ruling
• IRC §§ 704(b) and 752 — federal allocation principles expressly distinguished from the Louisiana ruling
• Revenue Information Bulletin 05-001 — analogous documentation required by Revenue
• LAC 61:III.101 — Private Letter Ruling authority and reliance statement

Source

• Landing page: Louisiana Department of Revenue Policies
• Original PDF: LA PLR 08-022

Original ruling text

Private Letter Ruling
Redacted Version
No. 08-022
Corporation Income Tax and Individual Income Tax
Motion Picture Infrastructure Credit
October 28, 2008
This is in reply to your request for a private letter ruling concerning whether or not the
Requesting Parties and Project will qualify for Motion Picture Infrastructure Credits.
FACTUAL SCENARIO
Statement of Facts
1.
By a letter dated June 16, 2008 (a copy of which is attached hereto as Exhibit A, the
“Pre-Certification Letter”) and subject to the limitations set forth therein, the
Louisiana Department of Economic Development (the “LED”) and the Office of
Entertainment Industries Development (the “Entertainment Office”) have approved
the Project A as a “state-certified infrastructure project” as defined in La. R.S.
47:6007(B)(12). To date, the certification by the LED and the Entertainment Office
of Project A as a “state-certified infrastructure project”, as such term is defined in
La. R.S. 47:6007(B)(12), as evidenced by the Pre-Certification Letter, has not been
revoked.
2.
Company A was formed as a limited liability company under the Louisiana Limited
Liability Company Law, La. R.S. 12:1301, et seq. Company A was formed in order
to build, own and operate a motion picture (as defined in La. R.S. 47:6007(B)(5))
production facility in Louisiana, which includes the Project A. Since the date of its
formation and at all relevant times described herein, Company A (a) has maintained,
and will continue to maintain, a registered office in the State of Louisiana; (b) has
been, and will continue to be, domiciled and headquartered in Louisiana; (c) has
been, and will continue to be, engaged in the business of building, owning and
operating a motion picture production facility. Company A is not owned, affiliated,
or controlled, in whole or in part, by any company or person which is in default on a
loan made by the State of Louisiana or a loan guaranteed by the State of Louisiana,
nor is Company A owned, affiliated, or controlled, in whole or in part, by any
company or person who has ever declared bankruptcy under which an obligation of
the company or person to pay or repay public funds or monies was discharged as a
part of such bankruptcy. Company A is a pass-through entity for tax purposes that
has not elected to be taxed as a corporation.
3.
At this time, Company A is a single-purpose entity that is not expected to have any
business activities other than building,
owning and operating a motion picture
617 North Third Street
P. O. Box 44098
Baton Rouge, Louisiana 70804-4098
225-219-2780  225-219-2759 Fax
TDD# 225-219-2114  www.revenue.louisiana.gov

Redacted PLR No. 08-022
Page 2 of 11
October 28, 2008

4.

5.

6.

7.

production facility, including the Project A.
The Pre-Certification Letter provides for, among other things, procedures for
certification of the amount of Infrastructure Tax Credits earned by Company A as a
result of its investment in Project A.
Pursuant to the Pre-Certification Letter, during the building of, or after completion
of, the Project A, Company A will submit to LED and the Entertainment Office one
or more auditor's reports of a Louisiana certified public account requesting that LED
and the Entertainment Office issue a Tax Credit Certification Letter. In each Tax
Credit Certification Letter, it is anticipated that LED and the Entertainment Office
will certify the amount of Infrastructure Tax Credits that have been earned by
Company A, that Company A is eligible to transfer and that are no longer subject to
recapture, disallowance, recovery, reduction, repayment, forfeiture, decertification,
or any other remedy that would have the effect of reducing or otherwise limiting the
use of the Infrastructure Tax Credits (collectively, “Recapture”).
Infrastructure Tax Credits earned by Company A will remain with Company A,
whether Company A is a single-member limited liability company that is disregarded
for federal tax or state tax purposes or is a multi-member limited liability company
that is classified as a partnership for federal tax or state tax purposes, and will not
flow through to or be allocated to the member or members of Company A, until such
flow through or allocation of Infrastructure Tax Credits is provided for in the written
limited liability company operating agreement of Company A executed by its
members effective February 19, 2008. Currently, the Company A operating
agreement provides that all Infrastructure Tax Credits that are earned by Company A
during a taxable year shall not flow through or be allocated to the holder of any
Company A membership interest, but instead, shall remain with Company A until
such time (including in subsequent taxable years) as all or any portion of such
Infrastructure Tax Credits are (i) sold or otherwise transferred by Company A or (ii)
allocated to Company A’s members.
Company A expects to transfer and/or allocate the Infrastructure Tax Credits for
value to one or more persons (as used herein, “person” means any individual or
entity) in one or more of the following ways:
a. Company A may sell or otherwise transfer all or a portion of the Infrastructure
Tax Credits to one or more persons.
b. Company A may allocate the Infrastructure Tax Credits to one or more if its
members on such terms that are agreed to by the relevant parties and as
permitted by the Company A limited liability company operating agreement. In
such event, Company A’s limited liability company operating agreement may be
amended to allocate up to 100 percent of the Infrastructure Tax Credits available
to Company A to certain of is members (the “Tax Credit Members”) even
though under the Company A limited liability company operating agreement (i)
as much as 100 percent of all profit and loss of Company A and as much as 100
percent of all income, gain, deduction, loss and credits (other than Infrastructure
Tax Credits) for federal tax and state tax purposes may be allocated to members

Redacted PLR No. 08-022
Page 3 of 11
October 28, 2008

c.

d.

of Company A other than the Tax Credit Members to whom the Infrastructure
Tax Credits are allocated; (ii) as much as 100 percent of all distributions of cash
and property of Company A (including distributions made in connection with
the liquidation of Company A) may be made solely to members of Company A
other than the Tax Credit Members to whom the Infrastructure Tax Credits are
allocated; (iii) the Tax Credit Members to whom the Infrastructure Tax Credits
are allocated may have limited voting rights or have no voting rights of any
kind; (iv) control, management, direction and operation of the affairs of
Company A may be vested partially or entirely in persons other than the Tax
Credit Members to whom the Infrastructure Tax Credits are allocated; (v)
Company A may have the right but not the obligation in its sole and absolute
discretion to redeem and terminate 100 percent of the membership interest in
Company A of any one or more Tax Credit Members to whom the Infrastructure
Tax Credits are allocated for a nominal cash payment (for example, $10) to each
such Tax Credit Member after such Tax Credit Member has been allocated the
Infrastructure Tax Credits to which it is entitled, at which time such Tax Credit
Members would be required to forfeit all rights to or with respect to any capital
contribution that they made to Company A and any capital account reflecting
such contributions; (vi) the Infrastructure Tax Credits allocated to the Tax Credit
Members may be vastly disproportionate compared to the relative capital
accounts of and capital contributions made (or to be made) by such Tax Credit
Members; (vii) the allocation of Infrastructure Tax Credits to the Tax Credit
Members may not be respected under principles of federal income tax law,
including Sections 704(b) and 752 of the Internal Revenue Code of 1986 and the
Treasury Regulations issued thereunder, as the same may be, modified or
amended from time to time, if such Infrastructure Tax Credits were federal
income tax credits; and (viii) Company A may not constitute a “partnership” for
federal tax or state tax purposes and each member of Company A may agree that
it will not treat Company A as a “partnership,” or itself as a “partner,” or the
membership interest in Company A as a “partnership interest,” or the allocation
of Infrastructure Tax Credits as a partnership allocation, for federal tax or state
tax purposes.
Members of Company A may sell all or a portion of their membership interests
in Company A to one or more persons (each, a “Substituted Member”) on such
terms that are agreed to by the relevant parties, in which event, the Company A
operating agreement may be amended to limit the rights of such Substituted
Members in the manner described in Paragraph 7(b) above.
Pursuant to an amendment to its operating agreement, Company A may allocate
all or a portion of the Infrastructure Tax Credits that are earned by Company A
to its members who upon receiving an allocation of Infrastructure Tax Credits
from Company A may in turn sell or allocate the Infrastructure Tax Credits, as
applicable, acquired to one or more persons in one or more of the ways
described in this Paragraph (7).

Redacted PLR No. 08-022
Page 4 of 11
October 28, 2008
8.

9.

10.

11.

Pursuant to its operating agreement Company A may retain Infrastructure Tax
Credits and then allocate, sell or otherwise transfer the Infrastructure Tax Credits
pursuant to one or more of the alternatives described in Paragraph (7) above in a
calendar year that follows the calendar year in which the Infrastructure Tax Credits
were originally earned by Company A and to persons who were or were not
members of Company A in the calendar year in which the Infrastructure Tax Credits
were originally earned by Company A. Each successive person that acquires,
whether by allocation or sale, the Infrastructure Tax Credits earned by Company A
in connection with Project A will sometimes be referred to hereinafter as a
“Transferee.”
Some, if not all, persons who will (i) acquire a membership interest in Company A
and receive an allocation and flow through of Infrastructure Tax Credits or (ii)
purchase Infrastructure Tax Credits from Company A will do so after Company A
has made some, or all, of its expenditures necessary to create Project A and after
Project A has been certified and completed.
Company A has never been, and is not currently, engaged in the business of
producing films, videos, television series, or commercials of any kind and has never
produced a film, video, television series, or commercial of any kind.
Upon the sale or transfer of Infrastructure Tax Credits, the seller/transferor and the
transferee of the Infrastructure Tax Credits will submit to LDR and the
Entertainment Office the notification of transfer required by La. R.S.
47:6007(C)(5)(b).

SPECIFIC RULINGS REQUESTED:
Based on the foregoing, Company A hereby requests each of the following specific
rulings:
Infrastructure Tax Credits Rulings
A. Louisiana Revised Statute 47:6007 gives the Entertainment Office and LED, jointly,
the exclusive authority to determine whether a project qualifies as a state-certified
infrastructure project. Therefore, because the Entertainment Office and LED, as
evidenced in the Pre-Certification Letter, have approved the Project A as a “statecertified infrastructure project,” as defined in La. R.S. 47:6007(B)(12), LDR will
abide by such determination with respect to Project A.
B. As a company domiciled in Louisiana that is not a motion picture production
company, Company A is eligible to earn Infrastructure Tax Credits under La. R.S.
47:6007(C)(2) and is entitled to claim and use any Infrastructure Tax Credits that
Company A earns in accordance with La. R.S. 47:6007(C)(4)(c) even if Company A
does not have any Louisiana tax liability.
C. Each Substituted Member and each Transferee are eligible under La. R.S.
47:6007(C)(2) and 47:6007(C)(4) to receive an allocation and/or transfer of
Infrastructure Tax Credits as described in the Statement of Facts above and each of
them is entitled to claim and use in accordance with La. R.S. 47:6007(C)(4) any
Infrastructure Tax Credits of which it receives an allocation and/or transfer, even if it
does not have any Louisiana tax liability.

Redacted PLR No. 08-022
Page 5 of 11
October 28, 2008
D.

E.

F.

G.

Louisiana Revised Statute 47:6007(C)(5) provides for the transferability of
Infrastructure Tax Credits not previously claimed by any taxpayer against its income
tax. Company A is eligible to transfer any Infrastructure Tax Credits that it earns and
each Substituted Member and each Transferee is eligible to transfer any
Infrastructure Tax Credits that it acquires as long as such credits have not been
previously claimed by any taxpayer against Louisiana income tax.
Under La. R.S. 47:6007(C)(4) an entity not subject to Louisiana corporate income
tax may allocate any Infrastructure Tax Credits it receives to its partners or members.
As a limited liability company that is not subject to Louisiana corporation income
tax, Company A is eligible to allocate any Infrastructure Tax Credits that it earns.
Each Substituted Member and each Transferee will be eligible to allocate any
Infrastructure Tax Credits it acquires only if it is an entity not subject to Louisiana
corporation income tax.
Company A is a single-purpose entity whose only business activities are building,
owning and operating a motion picture production facility, including Project A.
Company A is not involved in the actual production of motion pictures, and
therefore, is not a "motion picture production company" within the meaning of La.
R.S. 47:6007(C)(5).
Louisiana Revised Statute 47:6007(C)(2) provides that for state-certified
infrastructure projects approved by the Entertainment Office on or after January 1,
2005 and prior to January 1, 2009, if total base investment is greater than three
hundred thousand dollars, there shall be allowed a tax credit of forty percent of the
base investment with respect to such state-certified infrastructure project.
Therefore, if the combination of one or more auditor's reports and Tax Credit
Certification Letters indicates that the aggregate “base investment,” as defined in La.
R.S. 47:6007(B)(1), with respect to Project A exceeds three hundred thousand
dollars, then, in accordance with La. R.S. 47:6007(C)(2)(a), Company A will earn
and be entitled to claim an amount of Infrastructure Tax Credits equal to 40% of its
base investment to the extent Company A’s base investment is expended by
Company A on a state-certified infrastructure project as defined in La. R.S. 47:6007.
The Entertainment Office has the exclusive authority under La. R.S.
47:6007(D)(2)(d) to determine whether funds were properly expended with respect
to a state-certified infrastructure project prior to issuing a Tax Credit Certification
Letter. Additionally, LDR is aware of the Pre-Certification Letter whereby, among
other things, LED and the Entertainment Office may review and examine the
findings of the certified public accountant prior to issuing a Tax Credit Certification
Letter. Although LDR does not concede its authority to examine Company A, to the
extent that LED and the Entertainment Office certify by the issuance of a Tax Credit
Certification Letter funds as having been expended by Company A with respect to
Project A, then LDR will abide by such certification and will not, under La. R.S.
47:6007(E), under La. R.S. 47:6007(F), or otherwise, seek to Recapture any
Infrastructure Tax Credits associated with such expenditures unless such Recapture
is approved or requested by LED and the Entertainment Office; provided, however,
that LDR may recapture any Infrastructure Tax Credits taken in excess of

Redacted PLR No. 08-022
Page 6 of 11
October 28, 2008

H.

I.

those certified as earned in the Tax Credit Certification Letter issued by the LED and
the Entertainment Office, or if the LDR becomes aware of fraud or material
misrepresentation associated with the transactions described herein.
LDR further acknowledges and agrees that following the issuance of the Tax Credit
Certification Letter by LED and the Entertainment Office, LDR will not initiate any
action against Company A or a Transferee as the case may be, under La. R.S.
47:6007(E), 47:6007(F), or otherwise, to recapture, disallow, recover, reduce,
decertify, require repayment of, require forfeiture of or otherwise limit the use of the
Infrastructure Tax Credits allocated or transferred to a Transferee, as the case may
be, unless (i) LDR determines that Company A or one or more Transferees
individually or collectively claimed more Infrastructure Tax Credits than LED and
the Entertainment Office certified by issuance of one or more Tax Credit
Certification Letters, or (ii) Company A or the Transferee committed fraud or made a
material misrepresentation when, in each case, claiming or utilizing the
Infrastructure Tax Credits. In the case of Company A or one or more Transferees
individually or collectively claiming more Infrastructure Tax Credits than LED and
the Entertainment Office certified by issuance of the Tax Credit Certification Letter
any action to disallow, recover, reduce, or otherwise limit the use of the
Infrastructure Tax Credits will be directed solely against the person claiming more
Infrastructure Tax Credits than LED and the Entertainment Office certified. In the
case of fraud or material misrepresentation when claiming or utilizing the
Infrastructure Tax Credits on an income or franchise tax return any recapture action
will be directed solely against the person committing the fraud or making the
material misrepresentation.
Every infrastructure project that is approved by LED and the Entertainment Office as
a state-certified infrastructure project is issued a unique identification number. As
described in Paragraph (5) of the Statement of Facts, LED and the Entertainment
Office will issue a Tax Credit Certification Letter in response to each auditor's report
submitted pursuant to the Pre-Certification Letter. In the event any Infrastructure Tax
Credits are allocated, transferred or sold, then a copy of the credit certificate or
certificates evidencing such Infrastructure Tax Credits allocated, transferred or sold
must be submitted as part of the notice required by La. R.S. 47:6007(C)(5)(b). The
notice requirement of La. R.S. 47:6007(C)(5)(b) will be met if, in lieu of the credit
certificate or certificates evidencing the Infrastructure Tax Credits allocated, sold or
transferred, the transferor and the transferee submit a copy of the Tax Credit
Certification Letter that includes the unique identification number associated with
the state-certified infrastructure project.

Transfer and Allocation of Infrastructure Tax Credit Rulings
J.
Infrastructure Tax Credits earned by Company A will flow through to Company A's
members, at the time provided for in the limited liability company operating
agreement of Company A. Currently, the Company A operating agreement provides
that all Infrastructure Tax Credits earned by Company A will remain with Company
A, whether Company A is a single-member limited liability company that is
disregarded for federal tax or state tax purposes or is a multi-member limited liability

Redacted PLR No. 08-022
Page 7 of 11
October 28, 2008

K.

L.

M.

N.

company that is classified as a partnership for federal tax or state tax purposes, and
will not flow through to or be allocated to the member or members of Company A,
until such flow through or allocation of Infrastructure Tax Credits is provided for in
the limited liability company operating agreement of Company A as described in
Paragraph (6) of the Statement of Facts.
Louisiana Revised Statute 47:6007(C)(5)(e) states that a transferee of the
Infrastructure Tax Credit has only the right to claim and use the Infrastructure Tax
Credit that was available to the transferor at the time of the transfer and that LDR
shall disallow the Infrastructure Tax Credit claimed if the transferor did not have the
right to claim or use the Infrastructure Tax Credit at the time of the transfer. This
provision prevents a transferee from claiming the Infrastructure Tax Credit if the
transferor did not own the Infrastructure Tax Credit at the time of the transfer.
Company A, each Substituted Member and each Transferee will each have the right
to claim and use the Infrastructure Tax Credits, at the time earned or at the time of
the allocations or transfers described in the Statement of Facts, as the case may be,
notwithstanding their lack of sufficient Louisiana tax liability to use the
Infrastructure Tax Credits.
The 10-year carry forward period during which any Infrastructure Tax Credits may
be used begins on the first day of the calendar year immediately following the
calendar year in which the credits were originally earned, or in the case of a
structured infrastructure credit, the date upon which the credit is allowed to be taken,
regardless of whether or for what period of time the Infrastructure Tax Credits
remain with the person originally entitled to claim them prior to flowing through or
being allocated to or being transferred to one or more persons who utilize the
Infrastructure Tax Credits to reduce their Louisiana tax liability.
Each of Company A, each Substituted Member and each Transferee may allocate
(except if it is taxed as a corporation), sell or otherwise transfer in any year within
the carry-forward period applicable to the Infrastructure Tax Credits all or any
portion of the Infrastructure Tax Credits that have not previously flowed through or
been allocated to such company’s members or sold or otherwise transferred even if
such allocation, sale or transfer occurs in a year following the year in which the
Infrastructure Tax Credits were originally earned or acquired by the transferring or
allocating company. Any such allocation, sale or other transfer of Infrastructure Tax
Credits will constitute a valid transfer of Infrastructure Tax Credits under La. R.S.
47:6007.
The Infrastructure Tax Credits may be allocated or transferred to and claimed by any
person or entity in any calendar year within the 10-year carry forward period even if
the Infrastructure Tax Credits are allocated or transferred to that person or entity (i)
in a calendar year following the calendar year in which the Infrastructure Tax Credits
were earned by Company A or acquired by the allocating or transferring company
(ii) or if that person or entity was not a member of the allocating or transferring
company in the calendar year in which the Infrastructure Tax Credits were earned or
acquired.

Redacted PLR No. 08-022
Page 8 of 11
October 28, 2008
O.

P.

Q.

R.

S.

Each of Company A, each Substituted Member and each Transferee may admit
additional members or substituted members at any time, on such terms that are
agreed to by the relevant parties and permitted by their respective limited liability
company operating agreements (as may be amended from time to time), and any
Infrastructure Tax Credits that are earned by or that flow through or are allocated to
or acquired by any of the foregoing may be allocated among their respective
members in any manner set forth in their respective operating agreements, provided
the allocating company has not elected to be classified as a corporation for federal
and Louisiana state tax purposes.
Specifically, with respect to each of Company A, each Substituted Member and each
Transferee if any of the foregoing admits additional members or substituted members
on terms, including but not limited to the terms set forth in Paragraph (7)(b) or (7)(c)
above, and the rights of such members are limited in the manner set forth in
Paragraph (7)(b) or (7)(c) above, any allocation of Infrastructure Tax Credits by the
allocating company to such additional or substituted members will constitute a valid
allocation of Infrastructure Tax Credits under La. R.S. 47:6007, provided that the
allocating company has not elected to be classified as a corporation for Louisiana
state tax purposes.
The allocation of Infrastructure Tax Credits from Company A to each Transferee as
described in Paragraph (7) and Paragraph (8) above, will constitute a valid allocation
of Infrastructure Tax Credits under La. R.S. 47:6007 (i) in each case even though the
allocation of such Infrastructure Tax Credits may be disproportionate compared to
the relative capital account of and capital contributions made (or to be made) by the
person receiving the allocation and (ii) regardless of whether the allocation of
Infrastructure Tax Credits is or would be respected under principles of federal
income tax law, including Sections 704(b) and 752 of the Internal Revenue Code of
1986 and the Treasury Regulations issued thereunder, as the same may be modified
or amended from time to time, if such Infrastructure Tax Credits were federal
income tax credits.
Company A, each Substituted Member and each Transferee may sell or otherwise
transfer in any year within the carry-forward period applicable to the Infrastructure
Tax Credits all or any portion of the Infrastructure Tax Credits that have not
previously been sold or that have not flowed through or been allocated to such
company’s members even if such sale or transfer occurs in a year following the year
in which the Infrastructure Tax Credits were originally earned or acquired by the
transferring company. Any such sale or other transfer will constitute a valid transfer
of Infrastructure Tax Credits under La. R.S. 47:6007.
Any person receiving an allocation or transfer of Infrastructure Tax Credits will have
the right to claim and use the Infrastructure Tax Credits of which it receives an
allocation or transfer at the time of such allocation or transfer regardless of whether
(i) such person is an individual, a trust, an entity that is disregarded as an entity
separate from its owner for federal tax purposes, an entity that is classified as a
partnership for federal tax purposes, an S corporation, a C corporation or an entity
taxed as a corporation for federal tax purposes and (ii) the person allocating the

Redacted PLR No. 08-022
Page 9 of 11
October 28, 2008
Infrastructure Tax Credits is an individual, a trust, an entity that is disregarded as an
entity separate from its owner for federal tax purposes, or an entity that is classified
as a partnership for federal tax purposes, or (iii) the person transferring the
Infrastructure Tax Credits is an individual, a trust, an entity that is disregarded as an
entity separate from its owner for federal tax purposes, an entity that is classified as a
partnership for federal tax purposes, an S corporation, a C corporation, or an entity
taxed as a corporation for federal tax purposes.
Application of Tax Credit Rulings
T.
Any person, whether an individual or entity, who is allocated or transferred
Infrastructure Tax Credits may use the Infrastructure Tax Credits to offset such
person’s tax liability that accrued during (i) the same tax year in which the
Infrastructure Tax Credits were earned or (ii) any subsequent tax year in which the
Infrastructure Tax Credits could have otherwise been carried forward by the person
who originally earned the Infrastructure Tax Credits, in each case, regardless of the
tax year during which the Infrastructure Tax Credits were allocated or transferred to
such person and, in the case of an allocation of Infrastructure Tax Credits, regardless
of the tax year during which such person became a member or partner of the entity
allocating such Infrastructure Tax Credits.
U.

If (i) a person, whether an individual or entity, received an extension of time to file
its tax return for a particular tax year, (ii) such person had at the time that the
payment of its tax liability for such tax year was due (without regard to the
extension) a written purchase agreement to acquire Infrastructure Tax Credits
sufficient to offset the tax liability; and (iii) such person timely paid its tax liability
for such tax
year prior to filing its tax return for such tax year, then, subject to
Paragraph (T), such person may nevertheless use the Infrastructure Tax Credits to
offset such tax liability and obtain a refund of any resulting overpayment of tax.

V.

If (i) a person, whether an individual or entity, received an extension of time to file
its tax return for a particular tax year, (ii) such person had at the time that the
payment of its tax liability for such tax year was due (without regard to the
extension) a written purchase agreement to acquire Infrastructure Tax Credits
sufficient to offset the tax liability; (iii) such person files it tax return for such year on
or before the extended due date of the return; and (iv) such person acquires the
Investor Tax Credits prior to filing its tax return, then, subject to Paragraph (T), such
person may claim the Infrastructure Tax Credits at the time of filing its tax return on
or before the extended due date to offset the outstanding tax liability reflected on
such return and will not incur any interest or penalty for underpayment, late payment
or otherwise except to the extent the Infrastructure Tax Credits claimed on the return
are insufficient to satisfy any portion of the tax liability not paid when due.

W.

Under the provisions of La. R.S. 47:1675(B), a person who is allocated or transferred
Infrastructure Tax Credits may claim the Infrastructure Tax Credit prior to any other
equally applicable, refundable Louisiana tax credits and will receive a refund of the

Redacted PLR No. 08-022
Page 10 of 11
October 28, 2008

X.

refundable tax credits that the person is thereby unable to use, subject to the ruling in
Paragraph (T) above.
Any person may acquire and claim the Infrastructure Tax Credits and utilize them to
offset that person’s Louisiana tax liabilities (which the Infrastructure Tax Credits
may otherwise offset) whether or not (i) in the case of an individual, such individual
is a Louisiana resident and (ii) in the case of an entity, such entity is domiciled in
Louisiana, organized under Louisiana law or headquartered in Louisiana.

Other Rulings
Y. As of the date of this PLR, neither LDR, LED, nor the Entertainment Office has
promulgated any rules or regulations under La. R.S. 47:6007.
Z.
Revenue Information Bulletin No. 05-001, dated January 14, 2005, sets forth the
supporting documents that should be attached to the tax return with respect to
claiming Infrastructure Tax Credits. Louisiana taxpayers who have earned, received
an allocation of, or purchased either the Infrastructure Tax Credit will claim the
credits on the non-refundable credit schedules incorporated in the Louisiana income
tax returns. A specific line is provided for the Infrastructure Tax Credits on both the
individual income tax return and the corporation income tax return. Individuals will
claim the credits on the lines provided for them on Schedule G of the IT-540.
Corporations will claim the credits on the lines provided for them on Schedule NRC
of the 620.
AA. This private letter ruling has been signed by the Secretary of Revenue in whom has
been invested the requisite authority by Title 47 of the Louisiana Revised Statutes to
bind LDR. The regulation that authorizes LDR to issue private letter rulings, LAC
61:III.101, states that private letter rulings will be binding on LDR only as to the
taxpayer or taxpayers making the request and only if the facts provided were truthful
and complete and the transaction was carried out as proposed. If these requirements
are met, LDR will be bound by this private letter ruling.
BB. The regulation that authorizes the Department to issue private letter rulings, LAC
61:III.101, states that private letter rulings will be binding on the Department only as
to the taxpayer or taxpayers making the request and only if the facts provided were
truthful and complete and the transaction was carried out as proposed. If these
requirements are met, the Department will be bound by this private letter ruling. The
requirement that the statement of facts be complete is interpreted by the Department
to mean that all relevant facts have been stated. In addition to the facts stated, some
assumptions have been made based on the Department’s understanding of the
transactions proposed. As long as all facts relevant to the ruling request have been
provided in the request and the necessary assumptions made by the Department are
true, the complete statement of facts requirement has been met.
RULINGS
A. - D. We agree with your analysis and so rule.
E.
The role of LDR in the motion picture tax credit program is to accept the credits
that have been certified by the LED and the Film Office. LDR has no part in determining

Redacted PLR No. 08-022
Page 11 of 11
October 28, 2008
what qualifies as a state-certified motion picture production company. This question
should be addressed to the LED.
F.
Company A will be allowed to claim infrastructure tax credits equal to 40% of its
base investment expended on a state-certified infrastructure project as certified by the LED
and the Film Office.
G. - X. We agree with your analysis and so rule.
Y.
As of the date of this PLR, LDR had not promulgated any rules or regulations
under La. R.S. 47:6007.
Z.
Revenue Information Bulletin (RIB) 05-001 addresses documentation required for
claiming the motion picture investor tax credit; however, LDR will require similar
documentation as stated in RIB 05-001 in order to claim the motion picture infrastructure
tax credits.
AA. - BB. We agree with your analysis and so rule.
If you have any questions or need additional information, please call Leonore Heavey,
Senior Policy Consultant or Danielle B. Clapinski, Attorney, Policy Services Division, at
219-2780.
Sincerely,

Cynthia Bridges
Secretary
By:

Danielle B. Clapinski
Attorney
Policy Services

This correspondence constitutes a private letter ruling (PLR) by the Louisiana Department of Revenue, as
provided for by section 61:III.101 of the Louisiana Administrative Code. A PLR provides guidance to a
specific taxpayer at the taxpayer's request. It is a written statement that applies principles of law to a specific
set of facts or a particular tax situation. A PLR does not have the force and effect of law, and is not binding
on the person who requested it or on any other taxpayer. This PLR is binding on the department only as to
the taxpayer to whom it is addressed, and only if the facts presented were truthful and complete and the
transaction was carried out as proposed. It continues as authority for the department's position unless a
subsequent declaratory ruling, rule, court case, or statute supersedes it.