FORBES covers LA Digital Media Incentives, Call Them “Best Tax Incentives in the U.S.”

Louisianians in the startup or tech space should be very familiar by now with the the state’s Digital Media Tax Credits, which offer transferable tax credits up to 35% of digital media project costs spent in-state.  And since Forbes just wrote an article covering those efforts,  now the rest of the country knows about it as well.

In Forbes’ latest article,  Stephen Moret, Secretary of Economic Development for the State of Louisiana, talks about the future of this growing gaming and interactive region in this exclusive interview.   Some of the interview has been reproduced below:

What are the incentives Louisiana is offering for video game companies today?

There are two levels of the incentive.  There’s a 35 percent tax credit on all Louisiana labor directly involved in the development of the interactive products.  It wouldn’t include administration or executive work, but everyone that is actually involved in making and testing the game is eligible for that 35 percent tax credit on labor and 25 percent tax credit on all the direct support activities like a lease on the building, or the work stations, or training in that kind of activity.  So it ends up being a roughly 30 percent blended reduction in cost to do those operations in Louisiana.  We call it a tax credit, but really a company shouldn’t think of it as a reduction in their tax level exhibiting a very small number.  They can monetize this by selling it to third parties so that essentially you get the vast majority back as a check. Basically, if you have a $10 million total spend, your net actual spend after the tax credits is roughly $7 million.  It’s a huge benefit and it’s a permanent benefit. There’s no cap and there’s no phase out on that benefit.

That attracted Electronic Arts. How has that project been developing at LSU?

They have 400 people now. They’re going to be moving up to 600 people. They originally only anticipated having about 25 people full-time and 200 people part-time. They now have 400.  I think it is about 200 full-time and 200 part-time. They’re going to move up to 300 full-time and 300 part-time. It’s their national North American test center and they’re going to be shifting testing there not just from North America but around the world.  They test games like Madden Football, Tiger Woods Golf, the NHL game, FIFA, and anything significant. They have a bunch of other games that they are testing there and they’re extremely pleased with it. It’s growing like crazy. They’ve moved activity from Canada, California, and Florida to Baton Rouge.

Moret also says that LSU is adding a game design track for students called AVATAR (Arts, Visualization, Advanced Technologies and Research) and that universities in the New Orleans region are getting ready to jump on board as well.

You can read the full article here.