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Wry Kaiser

December 16, 2009

by:

Joe Patti

Michael Kaiser was in town as part of his Arts In Crisis tour. The session was videoed. I don’t know if it will be placed on the internet, but the content was pretty much the same as when he spoke in Madison, WI. I had watched that video back when Andrew Taylor discussed Kaiser’s visit to Madison. If the video of our local session becomes available, I will post it.

I am not going to give a synopsis of his talk here as I am wont to do. His thoughts are pretty widely disseminated through videos like the in WI and via his column on Huffington Post. I am just going to reflect a little on the experience.

He was a very entertaining speaker and the session was quite enjoyable. I encouraged my Assistant Theatre Manager to go because he hadn’t really heard any of this before. And our discussions after about how we should proceed were pretty productive.

Our mayor is the chair of the culture and tourism committee of the National Conference of Mayors and he is pretty enthusiastic about those causes. (He also bills himself as the “Singingest Mayor In America.” I was surprised that he didn’t take the opportunity today.)

He spoke, I think longer than anyone expected, about how important the arts are. He also stayed for the full 1.5 hour session. This impressed on me how important the topic of the arts was to him because he is always on the go. I have seen him get off a 7 hour flight that crosses the international dateline, speak at a meeting about public transportation and then out to another meeting. Since he was still around as the Q&A started, the moderator brought him back up to the stage to field questions about the arts in the city.

A few observations about the session with Kaiser. The first isn’t predicated on something he said. The session opened traditionally with a welcoming chant and then a hula display. I am not Hawaiian, nor am I practitioner of any Hawaiian performing arts. However, my investment in those art forms were such that I wished they had done a slightly different program. The hula was accompanied by singers playing ukelele. This is something many people are familiar with due to movie depictions. So what I found myself wanting was for a performance on ipu heke–double gourd drum. I wanted him to go away perhaps surprised about Hawaiian performing arts and knowing more than he knew when he arrived.

Later, I was gratified to hear him say that was what he aimed for in his programming–having people surprised at some of the events he put together. His example was the Arab Festival at the Kennedy Center earlier this year. He noted nobody expects you to celebrate Arab art in the current political climate.

At one point he underscored how much the arts are dependent on the kindness of strangers when it comes to arts education. This is no great revelation, I am sure. He gave the example of a 3rd grader who benefits from her teacher loving the arts and providing many opportunities for exposure. When the child moves on to 4th grade, if the teacher doesn’t like the arts, then the child doesn’t get any exposure. If the 4th grade teacher doesn’t like math, they don’t have the option of shirking instruction in that. It occurred to me this is actually the case even in states that mandate an arts component because few schools value the subject enough to monitor compliance or ensure a valuable experience.

For me, the talk solidified and confirmed some thoughts I had over Thanksgiving about how I should be approaching various elements of my job. It was good to have the Assistant Theatre Manager start to move in the same direction. I hadn’t really spoken with him about my thinking yet because I hadn’t entirely figured out how to put it into practice. Today was a good catalyst for that conversation.

State of the Arts

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Information You Can Use: Tax Treaties and 30% Withholding

December 15, 2009

by:

Joe Patti

I was recently fortunate enough to get into a conflict with my disbursing office on the subject of the 30% withholding for foreign performers.

Well, admittedly, I didn’t feel lucky at the time. The whole issue is very confusing and time consuming. However, the outcome is such that I am a good deal wiser and more informed about the process. And more importantly, I managed with the help of the artist’s agent and the IRS to secure full payment for the foreign performers.

For those of you who may not be familiar with the issue, count yourself lucky but also be aware that you may become embroiled in a situation requiring you to withhold 30% of an artist’s fee in the future in the absence of a treaty or the proper tax paperwork. I did a couple entries about five years ago which you may want to take a look at to gain some background.

The group we were looking to bring is coming from New Zealand. Their agent was on the ball and sent me the requisite tax paperwork claiming exemption back this summer. Not wanting to have any problems crop up when it came time to send the deposit, at the end of July I sent a memo accompanying the paperwork which included the details of the engagement asking if the 30% would be withheld. I was told it wouldn’t be. It wasn’t until the check was cut and on its way over to me that the decision was made to cancel that check and issue another one less 30%.

At question was Article 7 of the US-New Zealand Tax Treaty which reads:

“The business profits of a Contracting State shall be taxable only in that state unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the business profits of the enterprise may be taxed in the other State but only much of them as is attributable to that permanent establishment. “

The agent provided an interpretation where the first Contracting State was NZ. Our disbursing office interpreted the first Contracting State to be the U.S. and deemed the performance to be goods “created” in the U.S.

In came the IRS to the rescue! You won’t see that phrase too much in life so let me say it again. In came the IRS to the rescue!

The Central Withholding Agreements office provided the following guidance which they have given me permission to reprint for your edification. Be aware that all countries have different tax treaties, but many of them are very similar to the one the US has with New Zealand so this information can be applicable in many cases.

In the following, “business entity” refers to a production company or other type of operation which owns the rights to the production and performances being presented. The presumption here is that the artists/performers are either employees or contract players for the business entity, having no ownership interest or risk from loss in the production, thus making the business entity, rather than a venue or other payer, the withholding agent for payments to the artists. Payments to these performers would be subject to rules, regulations, and treaty considerations for the individuals as artists. The business entity may apply for a tax treaty benefit with regards to payments made to the business entity if the business entity is permanently located in a country that has a tax treaty with the United States.

A valid withholding certificate, W-8BEN, presented by the business entity to the venue is used to claim a tax treaty benefit for Business Profits. CAVEAT: The business entity MUST have a US Employer ID Number on the form W-8BEN to qualify for the exemption, otherwise 30% of gross income is required to be withheld and deposited with the US Treasury on behalf of the business entity.

Tax Treaties between the US and other countries are worded so that each country reads it and approaches it as a reciprocal agreement. In each case, the “Contracting State” is the country of residence of the business entity and the “other Contracting State” is the country in which they are performing services for remuneration.

Therefore, a US business entity applying Article 7 of the US-NZ tax treaty would use the US as “Contracting State” and New Zealand as the “other Contracting State” thereby claiming exemption from tax in NZ but being subject to full taxation in the US. The business entity could not claim exemption if they had a permanent establishment in NZ.

SIMILARLY, the NZ business entity would flip-flop the terminology taking NZ as the “Contracting State” and the US as the “other Contracting State” thereby claiming exemption from US taxation and subjection to full taxation in NZ. The business entity could not claim exemption if they had a permanent establishment in the US.

As a result, a non-resident alien business entity as described above will provide to the venue a Form W-8BEN claiming the business profits tax treaty provision. The venue is relieved from any withholding responsibilities for payments to the business entity.

The business entity is still required to withhold and deposit on any payments made to or for the benefit of the actual performers.

For the withholding requirements on the individual non-resident alien artists or athletes, you may contact the IRS at CWA.Program@IRS.gov

It should be noted, that while the payment may be exempt from the 30% withholding, the foreign company must still deduct U.S. taxes from payments made to their performers. More information on this may be found on the Artists from Abroad website.

Info You Can Use, Terms and Ideas

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Mad Man Delayed

December 14, 2009

by:

Joe Patti

I had marked this video intending to post it during Inside the Arts “Mad Men Week,” but totally forgot about it until coming across it today. The video is Rory Sutherland talking about how ad men create perceived value for objects. The has a great sense of humor so the video is just plain fun to watch.

My favorite bit comes toward the end when he talks about Post cereal’s roll out of Diamond Shreddies which literally turned the old Shreddies cereal on end. Inexplicably, the move was a little controversial and Post issued a “combo pack” of both cereals. (I gotta hope the controversy was manufactured by Post.)

The thing that might be most valuable for arts people is a quote at the end of his talk where he cites a quote “Poetry is when you make new things familiar and familiar things new.” Though in the case of the arts and current attendance trends, the familiar may be an entirely new experience.

He says it isn’t a bad definition of what advertising people’s job is: “To help people appreciate what is unfamiliar. But also to gain a greater appreciation and place a far higher value on those things that are already existing.”

Okay no surprise there. Apropos to my previous comment, arts people try to make their disciplines familiar to those who haven’t had much interaction with it every day.

Marketing/PR

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Holiday Memes? Bah! Humbug!

December 9, 2009

by:

Joe Patti

So our glorious Inside the Arts leader Drew McManus laid down a challenge of a Holiday Extremes Meme. Now, I think if you are a musician and can only name two of four good holiday concerts and one of the two (of four) worst concerts you name involves YOU performing, it isn’t quite fair to those of us who are non-musicians!

I have been to fewer holiday concerts than Drew, though I do remember the Christmas cantatas of my youth when the Catholic and Presbyterian congregations of my small community would come together so there would be enough people for a decent size choir.

One of my favorite Christmas music memories though was when I lived in Florida. There was a radio station in Tampa at the time which started playing Christmas music for hours on end starting Christmas Eve. There were some really great songs there that I had never heard before. You would go from Bing Crosby to “You’re A Mean One, Mr. Grinch” and then back to some choir softly singing.

That was when I heard the Bob Rivers’ classic, “I Am Santa Claus”

I have great memories of driving up to my sister’s house at 5 am Christmas morning listening to the music. Unfortunately, there was a year of new management and they stopped that practice.

However, in the spirit of offering new songs for the season, I wanted to turn people on to one. Don’t be fooled by the band name, Hoots and Hellmouth, or the title, A Song for Solstice, I am not trying to undermine the religious nature of the holiday. It is a nice song for the season without being cloying. The music comes courtesy of public radio station, WXPN’s 2008 12 Days of Christmas where they offered 12 free downloads of holiday music from local artists.

A Song for Solstice was smack in the middle at Day 6. If you want to check out other alternative holiday songs, scroll around on the page. I admit to being a sentimental sucker for #4 Dan May’s “Christmas in My Hometown.”

General Musings

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