Louisiana is the number three film producing state in the nation, but behind the multi-million dollar films and flashy actors lies the dirty side of what can only be called the state's tax credit industry. As explained by an article in the magazine Fast Company, the FBI is investigating whether or not a company was improperly granted film production tax credits, which in Louisiana can be converted to cash by resale to another party that pays state taxes. One credit granted was worth more than the entire budget of the film produced. In 2002, when the state first developed these credits there wasn't even a system in place for the independent auditing of expenditures.
Louisiana's former Film Commissioner, Mark Smith, is currently under investigation and, in a perhaps predictable twist, now works for the movie industry. The lack of oversight is not the only reason to question the whole idea of tax credits for film production. Their impact on economic development is questionable, particularly since nearly all states now have some type of film tax credit.