Suzi Wizowaty

Yesterday we passed a budget and an accompanying tax bill that will require non-profit performing arts organizations (those that sold more than $50,000 worth of tickets the previous year) to collect taxes on ticket sales. I certainly appreciate the financial straits the state is in and the desire and the need to find more money. But taxing ticket sales of non-profit arts organizations reflects a significant change of policy from current law, without adequate discussion. [This is my slightly revised floor speech, delivered in the end as a very condensed vote explanation!]

A little history: In 1994, some confusion arose about this question, and in 1995 therefore, to clarify this confusion, the legislature rewrote the existing statute -- 32 VSA 9743 (3) (B)-- exempting non-profit arts organizations from collecting sales tax unless they co-presented or co-produced with a for-profit organization. Disagreement about the interpretation of what this means in practice has led to this particular section of the bill.

In talking extensively about this issue with my colleagues the last few days, I discovered some interesting things: one is a lack of understanding of how hard non-profit arts organizations work to keep ticket prices down, as expressed by the sentiment, "What’s the big deal? They can just pass the tax along to ticket-purchasers." (But we haven’t addressed what the consequences might be. This is what we say when we either don’t get or don’t care about the impact of our legislation: "Hey, just buck up.")

The second thing I observed is an interesting bias against larger presenting arts organizations like the Flynn in Burlington, in favor of smaller, local groups, as if there is somehow more community and cultural value in seeing a charming, even excellent local production of Oliver! than there is in seeing world-class performers along the lines of Alvin Ailey Dance Theater or the Peking Acrobats or the African Children’s Choir or Grupo de Rua from Brazil, which can only be brought to Vermont by the kind of large organization that can raise significant dollars to subsidize ticket prices. (I’m not arguing that one is more valuable than the other but that they both contribute immeasurably to the richness of our cultural life.)

A third is a mistaken assumption about the demographics of people who attend performing arts. At the Flynn, for example, ticket prices are all over the map, determined by what the presenter charges. What most people in the general public don’t know is that the Flynn consistently makes free tickets available—to students and community groups.

Lastly, I also observed that there is no consensus around the role of government in supporting the arts. Most of my colleagues probably know that many other developed countries support the arts better than we do in the U.S. I happen to believe that we as citizens are far better served by the arts than the military, for example, but the larger issue is that we haven’t as a group had a chance to revisit this since the legislature passed a law in 1995 exempting non-profits from charging sales tax unless co-presenting with a for-profit entity.

In light of this list—misunderstanding of ticket pricing, bias against larger organizations, mistaken assumptions about who attends the performing arts, and a lack of consensus about the role of govt. in supporting the arts—I was disappointed last night that the conference committee agreed on an April 1 implementation date, rather than July 1, which would have allowed the legislature to address a host of questions before making a significant policy change. For example,

** What’s the role of government in supporting the arts? We provide literally millions of dollars in tax credits to for-profit businesses. Do we do this at the expense of non-profit arts organizations? What are we doing to support the sector of our economy whose mission is to enlighten, broaden, stimulate thinking, rather than make money?—but which, by the way, in the case of the Flynn, contributes $25 M a year to the economy of the Greater Burlington Area. In Brattleboro, the non-profit art sector contributes to the economy an amount almost equal to the budget of the entire town.

** What’s the logic behind setting a trigger that distinguishes between small and large organizations?

** If we believe that non-profit performing arts ticket sales should be taxed, should ALL ticket sales of non-profits be taxes, including those of the local nursery school, church, high school, etc? What’s the philosophical difference between the missions of the two?

** Finally, what is the impact of this tax on non-profit performing arts organizations, and more importantly, what’s the impact on the accessibility of the performing arts for Vermonters? Are we making it harder for Vermonters to have the broadening experiences of the performing arts?

I hope that next year’s legislature will give these questions a fair and thorough hearing.