Inside D.C. entertainment

10 things you should know about the proposed ticket tax

May 10, 2011 - 11:52 AM
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Mayor Vincent Gray has proposed a 6 percent tax on live performances for the 2012 budget – and local arts organizations aren't too happy about it. Here's what you need to know:

1. The meaning of "live performance" is ambiguous. It could mean a musical performance at a church or a school – not just main stage events at professional theaters. It could also include museum admission. Federal institutions would be exempt.

2. The ticket tax could make big bucks. It would rake in $2.3 million for the city, according to the Washington Business Journal. But that's just a drop in the bucket for a $322 million deficit.

3. The cost to theaters would be greater. City Paper's Ben Freed attended a hearing about the ticket tax yesterday:

"All of the research on marketing for arts organizations points to the fact that ticket prices are a major barrier to entry," [Step Afrika! director Brian Williams] said. Williams added that one series his company performs sells for $20 per ticket but has a production cost of $88 per seat. Step Afrika! already hustles between sponsors and donors to cover the $68 gap. Williams estimated a 6 percent sales tax would cost his group $5,000 a week.

4. This is the second major blow to arts organizations this year. Arts budgets have been slashed both federally and locally. The slashing of the National Capital Arts and Cultural Affairs grant has decimated the operating budgets of many larger local arts groups, while smaller ones have found their grants from the D.C. Commission on the Arts and Humanities reduced.

5. The tax could be good news for Maryland and Virginia theaters. Many arts patrons drive in from the suburbs to see a show. But if they're discouraged by the prices, they might look for entertainment closer to home – in theaters such as Signature, MetroStage, the Gunston Arts Center and the Artisphere in Virginia, and Olney, Round House, and the Clarice Smith Center in Maryland.

6. The tax could have a trickle-down effect to other businesses. Leaders of the Helen Hayes Awards noted in a press release that the tax could hurt "arts-related businesses, such as those that sell lumber for sets, fabrics for costumes, concessions, etc. as well as the restaurants, transit and the many other D.C. businesses so importantly supported by traffic attending arts events, and the DC government who loses the 10% tax it receives from restaurant sales by virtue of resulting reduced restaurant traffic."

7. Mayor Gray has equated theater to for-profit entertainment. On the Kojo Nnamdi Show on Friday, Gray said, "theaters really are the only ones that don't have that tax imposed. I mean, we have it at the Verizon Center and we have it at the baseball stadium... we have it on movies."

8. Council members are opposed. According to the City Paper: 

Every council member expressed some level of opposition to the tax in a round of question-free statements. "It's tough to hear about seeing your kid's school play and being taxed," said Brown, who's position on the tax is still viewed as more neutral.

Ward 2 Councilman Jack Evans was more stinging.

"The arts add to an otherwise black and white canvas and without the arts you have nothing," said Evans, who also lamented the current level of arts funding—$3.92 million requested for fiscal 2012 not counting the federal government's proposed transfer of $5 million to the District from the U.S. Commission on Fine Arts. "I'm so disappointed in our city. There was a conscious decision that this city government is no longer going to support the arts. And we're gonna tax you!"

9. Theaters have united against the tax. Arena Stage and the Helen Hayes Awards have sent mailings to their patrons encouraging them to speak up against the ticket tax.

10. A petition against the tax is being circulated. You can take a look at it here.