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Topic: Law Questions
Message: Posted by: silverfire9 (May 19, 2005 02:36PM)
I've been looking into what opportunities may exist in Tacoma, as that's closer to where I live and I wouldn't have to drive 26 miles to perform. I emailed a few people, asking what the policies on busking were, and finally got a reply back from one person.

Since one of the areas I was looking at was Ruston Way, a series of parks on the waterfront, I contacted the Metro Parks people, thinking they'd at least be able to tell me, "Ask there," if they didn't know the answer themselves. In my inbox today was a reply from them, stating that "only authorized concessionaires having a specific permit are allowed to sell, or carry on an activity for compensation or remuneration." And that they do this on a contract basis. So basically, the process excludes groups smaller than, say, a restaurant or a community event (like the Freedom Fair).

Additionally, I was told that anyone conducting business in Tacoma needed to have a business license, all permits required, etc. Which is understandable and reasonable, I think; the only thing is that, if busking is *not* your main business, but something you do on the side, then it shouldn't count as a business. I think that's how the IRS would view it, anyway. This is something I wouldn't worry about if I weren't broke, though; I'd buy the license if I had the money.

So. My question is this: does the first part, how the Metro Parks answered my question, sound reasonable/legal? And is this something that should be fought, perhaps? I can't fight it, if it needs to be, as I couldn't afford to. And besides, I don't even know if I'm good at busking yet; if I'm not good at it, it becomes a moot question. I wouldn't care if I could busk in the parks if I'm not good at it, lol.

I would assume one way around it would be to perform with no hat lines, but since I do need the money, that's not an incredibly viable option for me.
Message: Posted by: S2000magician (May 19, 2005 04:37PM)
While I cannot speak to most of the specifics you've raised - I live in Southern California and have no idea what Tacoma's like - I do know that whether or not the IRS views your activities as a business isn't relevant: this is an issue of local ordinances governing behavior, not federal laws concerning taxation. And, for the record, if you're making a profit the IRS will view it as a business whether it's your main source of income or, as you put it, "on the side". The IRS couldn't care less whether you're licensed or not; indeed, they don't care whether your business is legal in any respect or not: if you're making a profit you owe federal income tax. Recall that Al Capone wasn't convicted for murder, extortion, prostitution, racketeering, or moonshining; he was convicted for failure to pay federal income tax for all of his (illegal) income.
Message: Posted by: silverfire9 (May 19, 2005 05:05PM)
True. You do still owe taxes on it. That's not what I was referring to, however. I was referring to the fact that the IRS has a different form for you to use if you're self-employed. And they have a definition of what "self-employed" means. Doing something on the side, that does not produce the majority of your income, is considered a *hobby* business, not self-employment.

That's all I meant by that. Hobby vs self-employed.

And that's really secondary, anyway. That was just an aside about the business license stuff: as I mentioned, if I had the money, I'd gladly pay for whatever business license I needed. The question is do I need it? If busking turns out to be a hobby for me, something I make money from, but not the majority of my income, then is it really a business?

Since that's not something I can find an answer for here, that wasn't really a question I was asking. I was simply mentioning it, as it was part of the reply I got.

Thank you for your reply, however. I do appreciate it.
Message: Posted by: mrunge (May 19, 2005 06:47PM)
You might give a call to the local police department and ask the Desk Sergeant. They will be the ones to deal with you first anyway if there is a problem. Good luck.
Message: Posted by: Dave V (May 19, 2005 06:58PM)
It sounds like the Metro Parks people immediately assumed you were "conducting business" and answered accordingly. It's probably all they know. I used to work for the government. It's hard to get some of them to leave their "comfort zone" and actually think for themselves.

If you were to approach someone else, you might want to shift "directions" a bit and go for the "free entertainment" angle instead of "making money" angle. Donations are income to the IRS, but it's voluntary. If you don't ask for money up front, you're not technically "charging a fee" for the show therefore it's not a commercial business. Some areas have their own interpretation of this though. http://www.performers.net is your best resource. There are a lot of good stories from people who have gone through this.

If a search comes up blank, register and ask your question there. They've probably had more experience dealing with local bureaucrats than most of us.
Message: Posted by: Zack (May 20, 2005 03:26AM)
The relevant case law specifically excludes street performance from the definition of "selling" and "commerce". As long as you are not selling anything and not charging a set fee, you are not vending.

For god's sake don't ask the desk sargeant. Cops lie!

See you called city hall, they searched there regs and came up with: ""only authorized concessionaires having a specific permit are allowed to sell, or carry on an activity for compensation or remuneration."

They left it for you and your attorney to figure out what that means and if it applies to you. I'm not an attorney, but it doesn't. The fact that they were not able to provide specific information about the regulations concerning street performing means that there aren't any.

Street performing is legal everywhere in the USA (on public property). Some places are able to prevent it, but that's in violation of the law. Its the inverse of prostitution, which is illegal almost everywhere, but flourishes openly in some cities.

What I would tell you is read the case law, and go out and do it. If the cops try to stop you, explain that what you are doing is legal (read my NoHo story).they may tell you not to perform there, but that ther is another place that you can perform.

If they ticket you, fight the ticket. Odds are it'll get thrown out.
Message: Posted by: ed rhodes (May 22, 2005 06:14PM)
[quote]
On 2005-05-19 17:37, S2000magician wrote:
While I cannot speak to most of the specifics you've raised - I live in Southern California and have no idea what Tacoma's like - I do know that whether or not the IRS views your activities as a business isn't relevant: this is an issue of local ordinances governing behavior, not federal laws concerning taxation. And, for the record, if you're making a profit the IRS will view it as a business whether it's your main source of income or, as you put it, "on the side". The IRS couldn't care less whether you're licensed or not; indeed, they don't care whether your business is legal in any respect or not: if you're making a profit you owe federal income tax. Recall that Al Capone wasn't convicted for murder, extortion, prostitution, racketeering, or moonshining; he was convicted for failure to pay federal income tax for all of his (illegal) income.
[/quote]

I did ask the IRS once about income from magic and was told that unless it's more than a third of your income, they don't really pay that much attention. That was more than a few years ago and it may be different now. (Or the guy may have been wrong, God knows sometime people in the IRS don't know what their own by-laws are!)
Message: Posted by: Bill Palmer (May 22, 2005 08:42PM)
The IRS code doesn't say that, though. If you make a profit off the activity, and you deduct the expenses you incur, it's a business. If you don't show a profit for 2 out of 5 years, then it's called a hobby. You still have to report the income, but you can't deduct the expenses.

But don't ask the tax questions on the forum. Ask a CPA. That's what they do for a living.
Message: Posted by: ed rhodes (May 28, 2005 09:25AM)
This is true. I wouldn't expect someone at an audit to say; "But Mandrake01 on The Magic Café told me I could!"