OIDMTC (Ontario Interactive Digital Media Tax Credit) Presentation - CTAP Inc.
DIGITAL INTERACTIVE MEDIA
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1 DIGITAL INTERACTIVE MEDIA Wednesday, October 28, 2009
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DIGITAL INTERACTIVE MEDIA. Wednesday, October 28, 2009. Background. - PowerPoint PPT Presentation
Transcript of DIGITAL INTERACTIVE MEDIA
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DIGITAL INTERACTIVE MEDIA
Wednesday, October 28, 2009
Background
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The incentive program was created in 2005 by law RS 47:6022 aka the Louisiana Digital Media Act. The original program was to provide an incentive over six years on the development of digital interactive media products in the state of Louisiana. This program was to sunset by January 1, 2010.
This past session the program’s sunset was removed, the definitions were changed, the incentives were increased, and the administration of the program was revised. This past legislative session has left us with a completely different program to that of the one passed in 2005. Today, we will talk about our new program.
Agenda
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What is the program?
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What is the program? What is digital interactive media?
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What is the program? What is digital interactive media? What isn’t digital interactive media?
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What is the program? What is digital interactive media? What isn’t digital interactive media? Incentive and its characteristics
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What is the program? What is digital interactive media? What isn’t digital interactive media? Incentive and its characteristics Summary
What is the program?
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The program is an incentive for the development of digital interactive media in the state of Louisiana
What is digital interactive media?
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By Law:
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By Law:
"Digital interactive media" means products or platforms that are intended for commercial production, use, or distribution; that contain at least two of the following types of data: text, sound, fixed images, animated images, video, or 3D geometry; and that have all of the following three characteristics:
"Digital" means a system that uses discrete (discontinuous) values ordinarily symbolized numerically to represent information for input, processing, transmission, and storage. A digital system would be contrasted with an "analog" system, which uses a continuous range of values to represent information. The term "digital" includes, but is not limited to information input, processed, transmitted and stored via the Internet.
"Interactive" means a digital media system for inputting, processing, transmitting, or storing information or data in which users of the system are able to respond to the digital media system by inputting, transmitting, processing, or storing information or data in response to the information or data provided to them through the digital media system. "Digital media system" means communications delivered via electronic energy where the information stored, transmitted, or received is in digital form.
"Media" means communication tools used to store, transmit, distribute, and deliver information and data. The term "media" includes methods and mechanisms for information distribution through, but not limited to distributed networks, such as the Internet, and through compact disc, CD-ROM, various types of DVD, and other removable storage drives and devices.
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EXAMPLES
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Computer / Video Games
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Web Applications
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Mobile Applications
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Social Media Web Platforms
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Office Suites
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digital interactive media
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digital interactive media =
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digital interactive media = application software
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digital interactive media = application software The program is an incentive for the
development of digital interactive media in the state of Louisiana
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digital interactive media = application software The program is an incentive for the development of
digital interactive media in the state of Louisiana The program is an incentive for the development of
application software in the state of Louisiana
What isn’t digital interactive media?
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1) Software development primarily designed and developed for institutional, private, or internal purposes.
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1) Software development primarily designed and developed for institutional, private, or internal purposes.
2) Largely static Internet sites designed to provide information about a person, business, company, or firm.
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1) Software development primarily designed and developed for institutional, private, or internal purposes.
2) Largely static Internet sites designed to provide information about a person, business, company, or firm.
3) Products regulated under the Louisiana Gaming Control Law
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1) Software development primarily designed and developed for institutional, private, or internal purposes.
2) Largely static Internet sites designed to provide information about a person, business, company, or firm.
3) Products regulated under the Louisiana Gaming Control Law
4) Not necessarily all digital media products such as digitally recorded music, film, or animation are applicable.
Incentive and its characteristics
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What is the Incentive?
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What is the Incentive?
35% tax credit on Louisiana residents hired as labor
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What is the Incentive?
35% tax credit on Louisiana residents hired as labor 25% tax credit on all other development expenses that
occurred physically in Louisiana.
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What is the Incentive? 35% tax credit on Louisiana residents hired as labor 25% tax credit on all other development expenses that occurred physically in
Louisiana. No limit
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What is the Incentive? 35% tax credit on Louisiana residents hired as labor 25% tax credit on all other development expenses that occurred physically in Louisiana. No limit No minimum investment or threshold
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How does this work?
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How does this work?
Let’s say a web company X who is developing its new web application called AWESOME in Louisiana.
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How does this work?
Let’s say a web company X who is developing its new web application called AWESOME in Louisiana.
The the development for the web application software AWESOME is going to cost the company $ 75,000 for Louisiana labor and $25,000.00 for all of its other costs that occurred physically in Louisiana.
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How does this work?
Let’s say a web company X who is developing its new web application called AWESOME in Louisiana.
The the development for the web application software AWESOME is going to cost the company $ 75,000 for Louisiana labor and $25,000.00 for all of its other costs that occurred physically in Louisiana.
In total the company will spend $100,000.00 in Louisiana.
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If the company were to receive tax credits, how much are they going to receive?
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If the company were to receive tax credits, how much are they going to receive?
.35*(Louisiana Labor Costs) + .25*(Other Development Costs) = Tax Credits
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If the company were to receive tax credits, how much are they going to receive?
.35*(Louisiana Labor Costs) + .25*(Other Development Costs) = Tax Credits
.35*($75,000) + .25*(25,000) = Tax Credits
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If the company were to receive tax credits, how much are they going to receive?
.35*(Louisiana Labor Costs) + .25*(Other Development Costs) = Tax Credits
.35*($75,000) + .25*(25,000) = Tax Credits
$26,250 + $6,250 = Tax Credits
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If the company were to receive tax credits, how much are they going to receive?
.35*(Louisiana Labor Costs) + .25*(Other Development Costs) = Tax Credits
.35*($75,000) + .25*(25,000) = Tax Credits
$26,250 + $6,250 = Tax Credits
$32,500 = Tax Credits
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Because Company X did the $100,000 development of its web application software AWESOME in Louisiana the company will receive $32,500.00 in tax credits
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What can I do with tax credits?
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What can I do with tax credits?
Tax Liability:
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What can I do with tax credits?
Tax Liability: Use against tax liability
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What can I do with tax credits?
Tax Liability: Use against tax liability
No Tax Liability:
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What can I do with tax credits?
Tax Liability: Use against tax liability
No Tax Liability: Hold or sell (aka transfer) them
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How does this work?
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How does this work?
Let’s go back to Company X that received $32,500.00 in tax credits from developing its web application software AWESOME.
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How does this work?
Let’s go back to Company X that received $32,500.00 in tax credits from developing its web application software AWESOME.
Company X does not have any tax liability and does not wish to hold its tax credits
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How does this work?
Let’s go back to Company X that received $32,500.00 in tax credits from developing its web application software AWESOME.
Company X does not have any tax liability and does not wish to hold its tax credits
Company X finds Company Y who wishes to buy them.
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How does this work?
Let’s go back to Company X that received $32,500.00 in tax credits from developing its web application software AWESOME.
Company X does not have any tax liability and does not wish to hold its tax credits
Company X finds Company Y who wishes to buy them.
Company X sells the tax credits for $30,000.00 to Company Y.
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Company X has just earned $30,000, which it can now use for the marketing campaign of its new web application software AWESOME.
Summary
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The Digital Interactive Media Program is an incentive for the development of application software in Louisiana
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The Digital Interactive Media Program is an incentive for the development of application software in Louisiana
35% tax credit on Louisiana labor and 25% tax credit on all other costs
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The Digital Interactive Media Program is an incentive for the development of application software in Louisiana
35% tax credit on Louisiana labor and 25% tax credit on all other costs
No limit on the tax credits received
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The Digital Interactive Media Program is an incentive for the development of application software in Louisiana
35% tax credit on Louisiana labor and 25% tax credit on all other costs
No limit on the tax credits received No minimum investment required
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The Digital Interactive Media Program is an incentive for the development of application software in Louisiana
35% tax credit on Louisiana labor and 25% tax credit on all other costs
No limit on the tax credits received No minimum investment required Tax Credit can be held or sold
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OpportunityLouisiana.com
