Summer policy news: protected species, UBIT, visa changes, and arts funding
July 25, 2018
League speaks up in global protected species discussions
This week, delegates from across the globe are gathered in Geneva, Switzerland to consider a broad agenda that includes policies controlling how musical instruments may cross international borders under the terms of the Convention on International Trade in Endangered Species (CITES). The League is an official participant in the negotiations, working in partnership with global music organizations and conservation leaders to ensure that rules related to rosewood, ivory and other materials found in orchestral instruments address urgent conservation concerns while also supporting ongoing international cultural activity. The League provides essential assistance to orchestras as they navigate the permit requirements for international tours, and is also deeply engaged in efforts to improve the policies. Further policy improvements will be sought as the terms of the treaty are negotiated in May of 2019.
Read more about how the League is working in partnership with NAMM, WWF, and dozens other stakeholders in the current issue of Symphony magazine, "Conserving Endangered Woods: Advocating for Orchestras and Musicians."
(Pictured above: League VP for Advocacy, Heather Noonan, speaks up on musical instruments rules at CITES)
Urgent concerns about new UBIT rules
The comprehensive tax reform provisions signed into law last December include a new requirement for nonprofits to pay Unrelated Business Income Tax (UBIT) equal to 21% of the value of commuting and parking benefits provided to employees. This tax on nonprofit expenses is unprecedented and prompts many questions about how to comply with the new rules. While no guidance has been issued by the Internal Revenue Service (IRS) to clarify which benefits are subject to the tax and how to value certain benefits, the new requirements officially took effect beginning on January 1, 2018.
Since many orchestras offer parking and transportation benefits for staff and musicians, the costs of this new tax on nonprofits could be considerable. And, the IRS may choose to apply the tax whether nonprofits pay for benefits directly or employees pay them through a pre-tax compensation reduction agreement. The League has partnered with the broader nonprofit sector in meetings with officials at the U.S. Treasury Department, contributed to a recent Politico article on this topic, and has filed comments on behalf of orchestras to Treasury and IRS leaders requesting a delay in implementation and an immediate formal public rule-making process to clarify many outstanding questions about the new tax.
With the 2018 tax year already well underway, we'll be keeping orchestras informed as soon as any new guidance on this topic is issued by the Internal Revenue Service. You can take action today by asking elected officials to urge Treasury to delay this new tax.
Engage foreign guest artists? Big visa and tax changes ahead!
U.S. immigration and tax policies are changing in ways that will affect orchestras that engage international guest artists. Effective September 11, 2018, U.S. Citizenship and Immigration Services (USCIS) will have full discretion to deny visa petitions without first asking for more evidence to support the application by issuing a Request for Evidence (RFE) or a Notice of Intent to Deny, reversing years of practice. Meanwhile, USCIS is also setting in place a policy that will create barriers for artists seeking to extend their stay in the U.S. for additional performances. Learn more about each development in the latest news alert on Artists from Abroad: Denials, Requests for Evidence, and Extensions of Stay.
When it comes to paying guest artists, some artists can apply for an agreement that determines their tax liability in advance. U.S. organizations should be aware that the Internal Revenue Service has announced that starting October 1, 2018, nonresident performers will only be able to qualify for a Central Withholding Agreement if they individually earn $10,000 or more in gross income within the calendar year. Learn more here: IRS Narrows CWA Eligibility.
NEA and arts education funding moves forward
- Despite an attempt to cut 15% from the budgets of the NEA and National Endowment for the Humanities, bipartisan support in the House of Representatives prevailed in the completion of the Interior funding bill, which included a $2 million increase for each agency, to a level of $155 million. The Senate Appropriations Committee has passed a recommendation for the same amount, with the full chamber expected to take action soon.
- FY19 funding for Arts Education at the U.S. Department of Education received a vote of confidence in both the House and Senate. The Appropriations Committees of both chambers approved their respective bills to fund the departments of Labor, Education, and Health and Human Services, including $29 million for Arts in Education in FY19 - in fact, the Senate Committee calls for "no less than the fiscal year 2018 level" of $29 million. The full House and full Senate have yet to vote on the larger bills that contain this funding, so advocates are encouraged to contact their elected officials in support of robust Arts Education funding at the Education Department.
Summer homework: meet with elected officials!
The U.S. House will be Representatives will be taking its traditional August recess, while the Senate has shortened it its own recess to just the first week of August. If you have not yet invited elected officials to see your orchestras in action, try to get on their calendars while they are home. But remember, advocacy is year-round and does not always have to be in person. We all have a part to play in speaking up for orchestras, and together we can make a big impact!