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Officials: Louisiana’s music industry tax incentives are ‘underutilized’ |


(The Center Square) — A legislative subcommittee assembled to study the state’s music industry and ways to promote it held its first meeting in Baton Rouge on Monday.

The Subcommittee on the Study of the LA Music Industry under the House Committee on Commerce heard from an array of state officials and industry professionals on Monday about the current status of the industry and efforts to expand it.

The subcommittee stems from House Resolution 266 approved during the recent legislative session that tasks subcommittee members with developing recommendations for lawmakers “that will incentivize the development of an indigenous self-supporting industry” in Louisiana by Nov. 15, 2024.

Sherri McConnell, policy advisor for the Louisiana Economic Development’s Office of Entertainment Industry Development, highlighted the importance of intellectual property in growing the state’s music industry.

“If you focus on the people creating the content and give them the goods, services, and skills to monetize that intellectual property, we’ll always be able to” incentivize a state-grown industry, McConnell said. “That is Louisiana’s competitive advantage. … It is our greatest renewable natural resource, and we should own this industry.”

Louisiana currently provides a variety of tax credits for the music and entertainment industries in Louisiana. However, incentives for the sound recording tax credit program only created three jobs and about $341,000 in new sales to local businesses in 2021, and even less in 2022, said Chris Stelly, executive group director for entertainment at Louisiana Economic Development.

The data, he said, is “an indication that our current incentive program is underutilized at best.”

The department is working to find new ways to market and promote the program, Stelly said, as well as a local economist to “measure the true economic impact of the entire music industry” in Louisiana.

“We’re currently engaged with a firm to do that study and I hope to have it released in early 2024,” he said.

Stelly said anecdotal evidence suggests the state’s sales tax is a major reason why many live performances skip Louisiana, despite a tax credit to draw them in.

Lacey Chataignier, with the Louisiana Department of Culture, Recreation, and Tourism, also highlighted how the state is working to promote music tourism, including a new music trail slated to launch in the winter of 2024.

Chataignier and others repeatedly pointed to a strong supply of talent in Louisiana’s music industry but a lack of infrastructure and support services that drive that talent to other states.

Reed Wick, associate director for The Recording Academy based in New Orleans, noted that the music industry in 2022 contributed $1.2 billion to the state’s gross domestic product, supporting 30,049 jobs and 1,691 music establishments. The state is home to 2,997 royalty recipients and 25,150 songwriters and urged lawmakers to focus on protecting and incentivizing creators.

Like Chataignier, Wick pointed out that those creators often leave the state because of a lack of management, publishing, booking agents and other professional services they need.

“What we’re missing is the services that support that talent,” he said. “That’s a huge opportunity to capture income to bring home and create jobs in Louisiana.”

GNO Inc., New Orleans’ economic development agency, believes the music industry is at a “turning point” disrupted by the internet, and the organization is focused on working with startup companies to develop new models for monetization and administration for the future, Josh Fleig, senior vice president of business development, told the subcommittee.

“If we invest today in new models and new ways of monetizing music and building that here in Louisiana, then we don’t have to go beg Universal Music Group to create 50 accounting jobs,” he said. “That’s now how we’re going to build this.”

“Investing in education and investing in programs that can accelerate these businesses that can disrupt the future of music and create those jobs and drive that wealth to Louisiana is our key,” Fleig said.

The subcommittee is expected to reconvene in January and to possibly take future hearings on the road throughout the state.



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