Irrevocable Designee LLC
What We Do
Connecting
Irrevocable Designee LLC consults with Louisiana taxpayers and helps them connect with taxpayers who become irrevocable designees, short-term lender repaid with normally hard-to-find but incredibly effective income tax credits that will help them reduce their state income tax liability.
For Production Companies (e.g., MajorStudios, Networks, and Streamers):
Better Net Pricing:
Instead of accepting the State of Louisiana’s offer of $0.88 on the dollar (which includes an upfront fee), a Louisiana taxpayer will lend you $0.885 on the dollar value of tax credits with no upfront costs or interest. The loan is considered repaid in full once the State of Louisiana issues the tax credits to your irrevocable designee.
Faster Funding:
Receive your funds within 24 hours of closing with the private-sector, unlike the State’s process, which can take up to 7 months from completion of an audit. Feel free to use time-value-money calculator to see the savings.
For Louisiana Companies, Individuals, Estates, Trusts, and Entities with State Income Tax Liability:
Maximized Savings:
By allowing us to find and vet a production company that is willing to name you or your company as an irrevocable designee, the State of Louisiana will issue the tax credits to you or your company directly, saving you a net 7.5% on your Louisiana tax liability.
Minimized Risk:
There are no upfront fees, middle men handling money, or hidden financial risks to attaching tax credits to your tax return. Your transaction will close with a third party fiduciary institution, ensuring the simultaneous transfer of the credits to you and your loan funds to the production company.
How It Works
Irrevocable designee is a legal term found in Louisiana Revised Statue 47:6007 which states:
“(iii) A bank or other lender may be named as an irrevocable designee in the initial tax credit certification or other document submitted thereafter by a motion picture production company to the office… “
Motion picture production companies usually will not incur enough Louisiana income tax liability to take advantage of the tax credits generated from their productions, but they do need the cash value of these credits to help finance their work. Conversely, Louisiana-based companies and high-net worth individuals generally have capital available for short term lending and few ways to reduce their large income tax liability. Essentially, Irrevocable Designee LLC helps match these producers with Louisiana taxpayers to serve as irrevocable designees to receive the production company’s tax credits directly from Louisiana Economic Development in exchange for short term loans. The taxpayers can then apply those credits to offset their state tax liability and the producers have access to immediate cash to finance their production.
The only alternative available to producers under State law is to sell the tax credits back to the State of Louisiana at a discount. This process requires that the production company first write an upfront check to the department for 2% of the earned credits’ value and then wait for months for Louisiana’s Department of Revenue to send them a check for the value of the credits. Understandably, many producers would rather identify an irrevocable designee from the private sector who can provide immediate cash for the value of the credits.
To ensure the highest level of trust and transparency, each transaction closes as a distinct commercial loan with a third party escrow agent. Transfer documentation will be completed and delivered to escrow to be held with all funds until all requirements for the credit delivery are met. Release of funds and proof of credit delivery will be simultaneous, ensuring no funds are at risk and that the full value of the loan is repaid with the credit delivery. Irrevocable Designee LLC never handles money directly, ensuring a worry-free process for both parties.
Why Choose Us?
Thanks to our longstanding relationship with the movie industry and extensive experience working with Louisiana tax credits, we’ve earned the trust of both producers with reputable Louisiana taxpayers to ensure the satisfaction of everyone involved.
Patrick Mulhearn brings over 20 years of experience and relationships in Louisiana’s film and television industry including more than eight years at Louisiana Economic Development, working to grow Louisiana’s film industry, and an additional eight running Celtic Studios, the largest design-built studio in the Gulf South.
Executive Counsel Amanda Spain’s decades of legal experience working with tax credit financing ensures every tax credit transaction follows the rules to the letter of the law and all short-term loans and agreements are closed seamlessly. And as a Louisiana taxpayer himself who routinely utilizes tax credits to offset his own income tax liability,
Baron Davis knows firsthand how a hassle-free transaction, and technological efficiencies that champion the time value of money, will lead to real tax savings, increased capital investment, and the creation of more jobs for Louisiana’s economy and its citizens.
Our consulting fee for the Louisiana taxpayers is a small percentage of each transaction (between 3-4% of the total transaction, depending on closing and state costs). This consulting fee is factored into the deal for the taxpayer, making the process simple and transparent.
Is There a Catch?
The only limitation is the availability of tax credits. The State of Louisiana now caps its motion picture tax credit program at $125 million annually. And once credits are issued to a motion picture production company, it is too late for you or your company to be named as an irrevocable designee – so act quickly to secure your opportunity!
Ready to Get Started?
Don’t wait to take advantage of a program and practice that is proven to help taxpayers reduce what they owe the State of Louisiana. Fill out our online form today to request more information or schedule a consultation. Our team is ready to guide you through the process and maximize your benefits.