American state strikes game tax deal

Highly-competitive tax breaks will soon be offered to game studios based in the southern US state of Louisiana.

The Louisiana Digital Media Act will see development firms receive a 25 per cent tax credit for production and a 10 per cent credit on state payroll taxes.

As of 2007 there were 4,381 people employed in digital media firms across Louisiana, while the state’s game sector has seen an annual growth rate of nine percent since 2001.

The Entertainment Software Association has applauded the legislation, and indeed Louisiana Governor Bobby Jindal (pictured) for pushing the deal through.

“We commend Governor Jindal for his strong leadership as well as that of Senator Duplessis for expanding the state’s computer and video game development and production base, and helping lead the way in creating the next generation of entertainment innovation in Louisiana,” said ESA CEO Michael Gallagher.

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Developers and publishers live and work for years in states where games are created, providing a higher return on investment than any form of entertainment.”

The 25 per cent tax credit agreement isn’t too far from the industry’s current 40 per cent benchmark, set in numerous regions across Canada.