LONGBOAT KEY – U.S. Reps Vern Buchanan and Judy Chu (D-Calif.) today penned an op-ed in Bloomberg Tax advocating for tax parity for performing artists.
“Working artists desperately need the tax code to work for them again,” said Buchanan and Chu in the op-ed. “The nature of their industry means they regularly delve into personal funds to support transportation, a talent agent, or equipment. Raising thresholds for the tax deduction will allow more lower and middle-income artists to continue their craft without the stresses of making ends meet.”
Buchanan and Chu recently introduced the Performing Artists Tax Parity Act (PATPA) to update the existing Qualified Performing Artist (QPA) tax deduction to help struggling actors and performers.
Additionally, Fran Drescher, president of SAG-AFTRA penned an accompanying op-ed in support of PATPA.
You can Buchanan and Chu’s full op-ed here or below.
Working-Class Performers and Artists Need Our Country’s Support
By Reps. Vern Buchanan and Judy Chu
Awards season is over, and for many of us, that’s how we think of the entertainment industry: red carpets, A-list movie stars, and golden statues. But that’s not the reality of America’s entertainment workforce. The overwhelming majority of performing artists are working-class Americans doing their best to inspire audiences while making ends meet and providing for their families.
Whether it’s watching a movie or seeing live local plays or concerts, artists and people behind the scenes power our nation’s entertainment industry and show the beauty of the imagination. It’s hard to envision our lives without them.
These workers are the reason we partnered together to introduce the Performing Artist Tax Parity Act, or PATPA, which will help level the playing field for working-class performers.
Working performers in the entertainment and arts sectors are employees, not contractors. Over the course of a year, they must spend significant but necessary expenses to sustain employment. Working class professional artists can spend between 20% and 30% of their gross income in any given year just to stay in the business. Such expenses include ongoing training, equipment, travel for auditions, promotional material, and talent agent commissions.
While the tax code has allowed working artists the ability to take an above-the-line tax deduction for these necessary work-related expenses, the qualified performing artist tax deduction hasn’t been updated since its inception more three decades ago—during the Reagan administration.
That means the deduction is only available to those making less than $16,000 a year. Coupled with the unintended consequences of doubling the standard deduction and limiting some itemized deductions, this has left performing artists from coast to coast with tax increases. This means performing artists in cities and towns, from Pasadena, Calif. to Bradenton, Fla., with lower incomes are being hit with higher tax bills than they deserve.
Consider this example of a working couple in New York City who earned $87,000 in wages. They had about $17,000 in agents’ commissions. Their other necessary business expenses, including continuing education, dues, and job search expenses, amounted to $6,600. One of them also had unreimbursed out of town expenses of about $1,500.
Together, their unreimbursed business expenses totaled about $25,100 in just one year. They spent more than a quarter of their gross income on job expenses that aren’t deductible—this cost is devastating to the couple in an expensive city like New York.
In Los Angeles, a member of Actor’s Equity and SAG-AFTRA told us he owed $4,175 on his taxes because of job expenses he couldn’t deduct, instead of getting a refund. An Equity actor from Sarasota, Fla. similarly reported that she owed $1,300 in taxes.
These cases are not out of the ordinary. Thousands of arts professionals face necessary expenses to sustain employment, but the qualified performing artist tax deduction doesn’t reflect modern-day prices and the ever-demanding needs of the industry.
That’s where our bipartisan bill, the PATPA, comes in. To better reflect today’s cost of living, PATPA would raise the income ceiling for the tax deduction to $100,000 for individuals and $200,000 for married joint filers. To prevent the current situation from repeating itself, this legislation also includes automatic increases to account for inflation and the increased cost of living.
Working artists desperately need the tax code to work for them again. The nature of their industry means they regularly delve into personal funds to support transportation, a talent agent, or equipment. Raising thresholds for the tax deduction will allow more lower and middle-income artists to continue their craft without the stresses of making ends meet.
Our legislation will also continue to foster job growth and build local and state economies. In California, the arts and culture sector of the economy was a $261 billion industry in 2021, representing 7.7% of the state’s GDP. The industry supports 742,432 jobs, or 4.1% of California’s workforce.
In the Greater Sarasota and Bradenton area, nonprofit arts and culture also power the local economy, generating $342.4 million each year in economic activity and $244.6 million in household income, supporting 8,705 full-time jobs, and delivering $38.2 million in revenue to state and local governments.
We must do our part to ensure that performing artists have what they need to succeed and pursue their passion—to all of our benefit. We can start by passing PATPA and sending it to President Joe Biden’s desk for his signature.
Rep. Vern Buchanan (R-Fla.) represents Florida’s 16th congressional district. He serves as vice chair of the House Ways and Means Committee.
Rep. Judy Chu (D-Calif.) represents California’s 28th congressional district. She serves as vice ranking member of the House Ways and Means Committee and is co-chair of the bipartisan Creative Rights Caucus.
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