Summer heats up: latest policy round up and Congressional summer plans

June 21, 2019

Further Signs of Progress on UBIT Repeal

Momentum continues to build on the Hill to undo the Unrelated Business Income Taxon parking and commuting benefits that was created by comprehensive tax reform signed into law in December 2017. Yesterday, policymakers in the U.S. House of Representatives Ways and Means Committee approved a limited package of tax-related provisions, introduced by Chairman Richard Neal (D-MA), that included retroactive repeal of the unprecedented tax on nonprofit expenses. During consideration of the bill, Rep. Judy Chu (D-CA) supported the call to end this tax and entered the League's statement into the public record. The statement explains the harm created by the provision, resulting in significant new costs to orchestras and the broader nonprofit sector. Members of the Committee expressed bipartisan support for repealing the provision, but parted ways on how to pay for the overall cost of the broader package of tax law changes.

If your orchestra has paid UBIT for 2018 parking and commuting benefits, This email address is being protected from spambots. You need JavaScript enabled to view it.  more about how much this new expense has cost your organization. Your stories help the League make the case in Washington, D.C.! We will keep you informed as further action is taken in Congress.

 

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Giving USA Report Confirms Drop in Contributions by Individuals

Earlier this week, Giving USA released its report on the state of charitable giving in 2018. Several news outlets have reported on the findings, which showed that despite a strong economic year, total charitable giving dropped 1.7% when adjusted for inflation, and individual giving dropped 3.4% when adjusted for inflation. The changes in individual giving may be attributable to a decrease in the number of taxpayers eligible to itemize deductions, a stock market decline in late 2018, and the bundling of contributions in alternate years. The League has partnered with the broader charitable sector in urging Congress to create a universal charitable deduction that would encourage more giving by providing a tax incentive whether or not donors itemize their tax returns.

Giving USA data showed that contributions to arts, culture, and humanities is estimated to have stayed relatively flat, and when adjusted for inflation, showed a decline of 2.1%. Policy analysts, advocates, and decisionmakers will continue to monitor giving data throughout the year, especially as this is the first year tax payers are likely to see the effects of changes to their tax circumstances. The League encourages orchestras to This email address is being protected from spambots. You need JavaScript enabled to view it.  whether they too are experiencing some of these national trends indicating fewer small and medium-sized gifts, fewer overall number of donors, and smaller-sized gifts compared to prior years.

IRS Announces Progress on International Artist Tax Concern

Details will soon be announced about relief for foreign guest artists seeking to confirm taxes due for work performed with U.S. arts organizations. Late last week the IRS announced that its Central Withholding Agreement (CWA) program will offer a new simplified application process for applicants earning less than $10,000. 

As of October 1, 2008 the IRS implemented a new policy by which nonresident performers would only qualify for a Central Withholding Agreement (CWA) if they individually earn $10,000 or more in gross income within the calendar year. This change threatened to make performing in the U.S. cost-prohibitive for many artists. A proposal was submitted to the IRS to reinstate CWA eligibility, with the endorsement of many major U.S. performing arts organizations, including the League of American Orchestras. IRS management responded favorably to the proposal and have been working on developing a streamlined CWA process.

No further details are available regarding the timeframe for implementing the new process, and the $10,000 threshold still currently applies. As soon as the IRS announces details of the new policy and implementation date, the League will post news on our dedicated website, Artists from Abroad.

Treaty Negotiations Set for August Include Musical Instrument Policies

New dates have been set for the gathering of 182 parties to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), where musical instruments in use by orchestras and musicians across the globe will be on the agenda August 17 through 29. For orchestras and individual musicians seeking to buy and sell instruments across borders, or to simply travel internationally for performances, CITES sets limitations on this activity and requires permits for instruments that have historically been made with small bits of material from species that have now come under protected status, such as monitor lizards, sea turtles, and elephants. The League will participate in the deliberations, as treaty negotiators consider new rules related to items containing rosewoodcedrela, and mammoth ivory, and consider improvements to the Musical Instrument Certificate in use by touring orchestras. Together with its partners in the broader music sector, the League has spelled out policy positions that will support conservation efforts while preserving international cultural activity.

Celebrate the 4th in Your Community with Congress

Independence Day is just weeks away -- is your orchestra giving a concert or part of your community's July 4th festivities? If so, this is a prime opportunity to invite your elected officials to be part of the celebration and perhaps give some opening remarks to the audience. If your officials are already booked, remember that both the House and Senate will be in recess for all of August and now is definitely the time to reach out and make plans to meet, exchange mid-year updates, and let them know how your orchestra has been engaging and serving the community in 2019. If you're feeling especially organized, see the rest of our Congressional Calendar online and start planning! And remember, you can always brush up quickly on the issues and top talking points by visiting any of our online campaigns.