Two lawmakers in the House reintroduced bipartisan legislation Wednesday to change a provision in the Tax Cuts and Jobs Act that makes it difficult for performers to deduct business expenses.
The Performing Artist Tax Parity Act, sponsored by Rep. Judy Chu, D-California, and Vern Buchanan, R-Florida, would update the Qualified Performing Artist tax deduction to help artists deduct work-related expenses. The Tax Cuts and Jobs Act of 2017 mostly eliminated the ability to claim miscellaneous itemized deductions that used to allow performing artists to deduct their work expenses. Elimination of the deductions has caused many artists to pay thousands more in taxes. The proposed legislation would correct this problem by updating the thresholds of the Qualified Performing Artists Deduction to enable more lower and middle-income performing artists to claim it.
The bill was introduced during the previous congressional term but failed to advance. Proponents hope the legislation will be passed this year after many performing artists saw much of their income dry up since last year as a result of closed theaters, clubs, arenas and other venues during the COVID-19 pandemic.
“After an unprecedented pandemic that darkened stages and film sets around the country, performing artists face a long recovery that could mean being some of the last people to return to work,” Chu said in a statement. “That is why we must restore tax deductions that let these workers seek employment without facing steep personal expenses.”
She noted that Congress has already acted to support theaters through the Small Business Administration’s Shuttered Venue Operators Program grants. “Now we must act to ensure that the actors, musicians, and artists who make performances so special are supported as well,” Chu added. “Expenses like head shots, training/classes, management, agency and legal fees, and more force professional artists to spend up to 30% of their gross incomes just to stay in business each year. For years, these expenses could be written off in their taxes, but that deduction was lost in the 2017 tax law, requiring artists to spend thousands more. This is an untenable hit to working families that hurts our economy and communities.”
The problem actually dates back even before passage of the Tax Cuts and Jobs Act and aims to level the playing field with other types of businesses that are still allowed to write off their expenses.
“The overwhelming majority of performing artists are lower-income and middle-class Americans struggling to make ends meet, while simultaneously pursuing their passions,” Buchanan said in a statement. “It’s past time to update this 30-year-old law to deliver needed tax relief for performing artists in Southwest Florida and across the country.”
The legislation received endorsements from several labor unions representing performing artists.
"We have been fighting for 35 years for this legislation because it will allow artists and media professionals to keep more of their hard-earned money, especially now when they most need it,” said SAG-AFTRA president Gabrielle Carteris in a statement.
“I am grateful for the leadership of Representatives Chu and Buchanan as they fight for tax fairness for performing artists while the industry is in a historic crisis,” said Kate Shindle, president of Actors’ Equity Association, in a statement. “The overwhelming majority of Equity stage managers and actors are working-class people who work hard to make ends meet, and unlike other workers, they often have to spend 30 percent of their income on business expenses. Our producers can deduct their business expenses, and we should be able to do so, too. The Performing Artist Tax Parity Act will put more money in the pockets of working performers when they need it the most as we work toward recovery in the arts sector.”
“The recent loss of necessary business expenses that were regularly deducted by musicians and performers under the Qualified Performing Artist (QPA) provision of the federal tax code, which were eliminated with the passage of Tax Cuts and Jobs Act of 2017, resulted in a major tax increase for working musicians, now struggling to recover from irreparable loss to their income due to the COVID 19 pandemic,” said Ray Hair, president of the American Federation of Musicians of the US and Canada. “It will help professional musicians and other entertainers recover from the ravages of the pandemic and become whole again.”
“This is an excellent example of Congress putting aside partisanship to right a wrong that affects thousands of middle class behind-the-scenes entertainment workers and creative professionals,” said Matthew D. Loeb, president of the International Alliance of Theatrical Stage Employees International, in a statement. “This unnecessary tax hike has been hurting our members long before the COVID-19 pandemic shut down our work and wiped out our wages. Now, with a full return to work in sight, Congress should pass this bill, restore tax fairness, and ensure our workers come back stronger than before.”
Other endorsements came from officials at the AFL-CIO, Americans for the Arts and Theatre Communications Group
