From budget slam to tax slam! New ticket-tax in Pennsylvania!

taxes
As details of  the $27.9 billion state spending plan became known late Friday in Harrisburg, word spread of the inclusion of the state sales tax to performing arts programs – dance, music, theater – and other cultural venues, such as museums and zoos, to generate about $100 million.

This initiative spearheaded by Republicans, who have remained steadfast in their opposition to any new taxes, calls for the creation of a special fund. The fund would get the bulk of the ticket-tax revenue, although any mention of percentage has remained ambiguous at best. This fund would be used to support cultural institutions previously subsidized by the general fund, such as museums, theaters, and zoos

While some undeclared portion of the new cultural sales tax would flow back to venues, the overall effect will be insignificant given current reductions in state support for cultural institutions. What is more likely, is that audiences now facing higher ticket prices during an already difficult economy, will simply attend less events or not at all. This overall effect will only reduce revenue even further.

Even more interesting is that this new cultural tax is not being imposed on movies or sporting events, which would generate greater revenue potential. Essentially non-profits, which have always struggled, are now at a competitive disadvantage. For the occasional attendee to cultural events or for families trying to take advantage of the educational aspects these venues have to offer, this added tax poses a real financial barrier.

What the state fails to realize is that cultural organizations generate sales not only for themselves but also for related industries such as restaurants, hotels, transportation and tourism. The overall effect of this new sales tax to performing arts will be nothing short of disastrous.

7 Comments

  1. I am looking into this, but if my understanding is correct, the tax for Philadelphia arts and culture organizations actually is 8%. The City will raise its sales tax to 2% on October 8. The State sales tax, outside Allegheny County, is 6%. All taxes are handled by the PA Department of Revenue, which has various timelines and e-filing regulations for organizations to remit their taxes to the state, depending on their income and size.

    Joanna Mullins
    Development & Planning Director, SHMD

  2. From what I have read in the bill, it looks like it will be a 7% tax on all tickets/fees to cultural events. This is substantial!

  3. From the Greater Philadelphia Cultural Alliance…

    Dear Steven,

    After an 80 day impasse, Governor Rendell and leaders in the General Assembly announced a budget deal Friday evening. Great news, right? Not so fast….

    It seems that Governor Rendell and the General Assembly think they can balance a budget on the backs of our region’s arts and culture. For the first time in Pennsylvania, the state sales tax will be applied to tickets for theater, dance and performing arts events, concerts, museums, historical sites, zoos and parks. The word from Harrisburg is that this revenue generated from these taxes could result in long-term funding for our sector. However, sports and movies – which we all know to be big revenue generators – can keep their tax exemptions in Pennsylvania. Why are nonprofit cultural institutions being singled out?

    In these tough times, even a small increase in a ticket price can be the deciding factor for a family of four looking to spend an afternoon at the Philadelphia Zoo or the Museum of Art. A tax will decrease the affordability of Philadelphia’s myriad cultural attractions – and hurt organizations who are already seeing a decline in admissions and revenue.

    If Harrisburg is serious about looking for long-term solutions to fund arts and culture – then we should be invited to the table. Let’s band together to let our legislators know we think a sales tax on nonprofit cultural institutions is shortsighted – and that we want an invitation to the conversation. Once the budget agreement is drafted into legislation, we’ll only have a ten day window – so the time to act is not tomorrow, but NOW.

    Here’s what you can do:

    Step 1: Find the Harrisburg office phone number (look for the 717 area code) for both your state senator and representative using our handy Legislator Lookup: http://ga1.org/culturalalliance/leg-lookup .

    Step 2: Need some help with your message? Use the following call
    script:
    Hello, my name is ________, and as a resident of _______, I’m calling in opposition to an expansion of the state sales tax on the backs of nonprofit arts and cultural organizations in order to balance the FY10 state budget. In these tough economic times, increases on ticket prices only taxes out working families out of theaters, museums, and zoos. Interestingly, sports and movies – which are huge revenue generators for Pennsylvania – remain exempt from the tax. This doesn’t seem right. I think that those of us who work in, or support these nonprofit institutions in our region should be a part of the conversation on long-term solutions for cultural funding. I ask that Senator/Representative _________ brings this message to caucus leadership before the budget is signed into law.

    Step 3: Once you’ve delivered the above message, ask if you can meet with your legislator in person to deliver the same message. Need some help in preparing for a meeting? Email sarac@philaculture.org with any questions – and please report your call and if you’ve scheduled a visit to the same address.

    I know I’ve asked a lot of you this summer, but every single time, you’ve mobilized quickly. This time, it’s more important than ever. We can’t let our legislators get away with a last ditch effort to close the statebudget. Governor Rendell should know better – he laid the foundation of Greater Philadelphia’s artistic and cultural renaissance through projects like the Avenue of the Arts. Nonprofit arts and cultural organizations aren’t in the business for profits – but to provide quality, affordable programming for all members of the community. We can’t tax those opportunities away.

    Thanks for all that you do,

    Sara Cederberg
    Grassroots Advocacy Coordinator

  4. What percent is this proposal or is it a set fee per ticket? Are the Movie Theaters and Sports venues paying off someone to be exempt? Do they think cause we’re all small independent orgs that they can push this on everyone? Are they taxing dance shoes and theatrical makeup next? How can we stop it?

  5. What date is this going into effect? I already have had my Nutcracker tickets printed. This is very bad news. I don’t think tiny, self-funded dance companies should be forced to support large organizations that are already subsidized and getting grants.

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