Tax mechanisms to support arts and culture

Published in: GIA Newsletter, Vol 9, No 2 (Fall 1998)

Institute for Community Development and the Arts of Americans for the Arts
Review by Tom Schorgl

Hotel-Motel Taxes for the Arts
AMS Planning and Research, edited by Randy Cohen - 1996, 11 pages

Sales Taxes for the Arts
Duncan M. Webb, AMS Planning and Research - 1996, 15 pages

Amusement Taxes for the Arts
Martha I. Dodson, edited by Rachel S. Moore - 1997, 14 pages

Americans for the Arts Books c/o Whitehurst & Clark, 100 Newfield Avenue, Edison, New Jersey 08837, 800-321-4510 ext. 241, www.artsusa.org.

These pamphlets, published by the Institute for Community Development and the Arts of Americans for the Arts, describe three different methods for generating public revenue for arts and culture. Each brochure gives helpful case studies of ways that specific communities nationwide have applied each taxing program. The pamphlets include both quantitative data such as how much funding a particular tax generated and qualitative information such as the value of establishing a strong coalition between cultural leaders and convention and visitor bureaus when considering a hotel-motel bed tax. The pamphlets describe preliminary stages that are helpful steps toward initiating specific taxing systems.

Sections titled "Conclusions" in the Hotel-Motel Taxes for the Arts and in Sales Taxes for the Arts provide a basic analysis of strengths, challenges, opportunities, and obstacles associated with each of these two taxing mechanisms. Amusement Taxes for the Arts has a similar analytical section, although it is divided under two subheadings: “Is an Amusement Tax Right for Your Community?” and “Critical Issues to Consider.” This section provides a more in-depth critique of the complexities of entertainment taxes and the ways in which they can result in complications for arts and cultural organizations. The question is raised, for example, of whether an amusement tax will be an asset or a liability to nonprofit cultural organizations if they are not themselves exempt from the tax.

The three pamphlets are well-written and succinct. They provide clear overviews for readers who are unfamiliar with public sector cultural funding mechanisms. A final suggestion: Read Sales Taxes for the Arts first. It provides a good definition of special tax districts and local option taxes. Both hotel-motel taxes and amusement taxes are examples of local option taxes.

Tom Schorgl