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H.R. 3121 (116th): Performing Artist Tax Parity Act of 2019


How much should a performer be allowed to earn and still take tax deductions for certain expenses?

Context

Performing artists pay out of pocket for many expenditures such as union dues, travel to auditions, and talent agents. In some cases they could spend as much as 30% of their income on such items.

These are known as “miscellaneous itemized deductions” and 2017’s Republican tax reform bill eliminated them,”. As a result, thousands of performing artists saw tax increases in a law meant to lower taxes.

Technically, such deductions may still be allowed under a 1986 law, but in practice almost nobody takes them. That’s because the maximum income allowed to qualify for such exemptions has remained unchanged for 33 years: $16,000.

The Hollywood Reporter crunched four real performers’ tax returns and determined that all four would see tax increases as a result of the 2017 law — more than doubling to +236% for one of the four, an actor.

What the bill does

The Performing Artist Tax Parity Act would once again allow such performing arts tax deductions to qualify as “miscellaneous itemized deductions.” It would also raise the maximum eligible income level to $100,000 for individual filers and $200,000 for joint filers.

It was introduced on June 5 as bill number H.R. 3121, by Rep. Judy Chu (D-CA27) and Rep. Vern Buchanan (R-FL16). Rep. Chu’s district borders Los Angeles, home of perhaps more performing artists than anywhere else in the country.

What supporters say

Supporters argue the bill levels the playing field for actors, musicians, and others who spent greatly out of their own pocket and can no longer claim the tax deductions they previous could.

“Expenses like head shots, transportation, and more force professional artists to spend up to 30% of their gross incomes just to stay in business each year,” Rep. Chu said in a press release. “For years, these expenses could be written off in their taxes, but that deduction was lost in the new tax law, requiring artists to spend thousands more. This is an untenable hit to working families that hurts our economy and communities.”

What opponents say

In all likelihood, opponents would say that the 2017 tax reform law sufficiently cut rates to a level that most performers still saw a reduction in their taxes, even if the exemptions were effectively eliminated. However, GovTrack was unable to locate any specific objections to this specific issue.

Odds of passage

The bill has attracted three bipartisan House cosponsors: two Republicans and one Democrat. It awaits a potential vote in the House Ways and Means Committee.

Considering that most professional performing artists probably live in blue districts, it’s unclear whether this would have sufficient level of bipartisan or geographic support to pass.

Last updated Jun 21, 2019. View all GovTrack summaries.

The summary below was written by the Congressional Research Service, which is a nonpartisan division of the Library of Congress, and was published on Jun 5, 2019.


Performing Artist Tax Parity Act of 2019

This bill amends the Internal Revenue Code, with respect to the above-the-line deduction of expenses of performing artist employees, to increase to $100,000 ($200,000 for joint returns) the adjusted gross income limitation for calculating the phaseout of the deduction. The increased amount is adjusted for inflation for taxable years beginning after 2019.