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The Magic Cafe Forum Index » » Tricky business » » State Taxes (other than one I live in) (0 Likes) Printer Friendly Version

Decomposed
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Question for the traveling pros. I am now traveling and speaking in other states. Aside from the chaos of flying, now I am dealing with state income tax. First of all, I live in a state with NO state income tax. However, I perform in other states with state income tax. I have not received any paperwork nor did any paperwork for any of these companies and no idea how entertainers travel state to state do taxes. Do we have to pay the host state taxes per each state we perform in?

I received this from my advisor:

Okay, your situation is called being a "nonresident entertainer". Every state deals with this differently, and Indiana in particular doesn't require you to pay any taxes for being in this category.
Legally, I'd recommend looking up the nonresident entertainer guidelines for each state you perform in, and filing a state tax return for those that require it.
Decomposed
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After reading up on this, I am so glad I don't do virtual presentations! Missouri seems the strictest of all. Fortunately, My last stop and next one do not collect state income tax from performers.
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In late 2020, about 30% of remote workers said they were doing their job in a different state than where they were before the pandemic, according to a Harris Poll for AICPA.

However, more than 70% of those surveyed didn’t know telecommuting to another state may affect their taxes. While many states waived tax filing for temporary remote workers in 2020, those reprieves are lifting for 2021.

Ouch. What a complicated mess for virtual entertainers.



"If someone is touring, then certain states will have their hand out."
Robert Seltzer
CPA AT SELTZER BUSINESS MANAGEMENT
JordanB
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If you are doing Zoom shows you are generally taxable where you physically do the show. Generally, if you are in a state with no income tax that income wouldn't be subject to tax. States are trying to change this, but the zoom example is generally pretty straight forward. The telecommuting example provided above really has to do with whether a business is taxable in a state. For example the company I work for has a production facility in Pennsylvania - all the work is done in Pennsylvania, all the sales are done in Pennsylvania - there is nothing in another state. Now due to the pandemic some of my workers are living at home. One of those workers lives in Maryland and does telework - does that one remote worker give Maryland the right to tax some of the business income? That's the question those telework laws really address.

Here are just a couple of thoughts on state taxes:

-if you are organized as a corporation or LLC be careful about various state and local filing requirements. LLC's have some various requirements for filing forms/fees in other states. The most egregious (in my opinion) is California which charges $800 a year (regardless of income), plus an additional tax based on your gross receipts (up to $12K year).

-Zoom shows generally would be taxable where you physically perform the show. Services (ie- a show or speaking) are generally sourced to where the service is performed. States are trying to change this - but this is generally a bedrock tax principle.

-If you are flying/driving to another state you may be subject to income tax in that state. Nonresident entertainer and other items are carved out for people who are only in the state occasionally - BUT - every state is different. A lot of those rules are for athletes and movie production type people - but in general - if you are physically in another state performing services they have a right to tax the income you earned.

-If you are selling anything physical (back of room sales) be wary of sales tax rules, and business license requirements.

- Have a good CPA.
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Great info Jordan, thanks!
Dannydoyle
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Before you do anything find an entertainment accountant. Not the cheapest guy you can find but one who has been at it for years and knows the industry. Make sure he deals with the multiple state thing.

Then ask him what rules apply in your state from other states and he will give you very specific directions on what to do for your very specific situation. Otherwise you are just guessing.
Danny Doyle
<BR>Semper Occultus
<BR>In a time of universal deceit, telling the truth is a revolutionary act....George Orwell
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