Tax Breaks For Artists, Their Landlords & Their Customer

Posted: Mon Apr 14, 2008 1:21 pm

So here's something interesting I just came across on MichiganVotes.com . It's a proposed bill to offer artists, their landlords and their customers tax breaks to help promote "cultural" business in re-developing neighborhoods.

House Bill 5948 (Authorize "cultural redevelopment districts" and tax breaks )
Introduced by Rep. Jeff Mayes on April 8, 2008, to authorize an income tax credit for landlords who rent to artists in a "cultural redevelopment district" authorized by House Bill 5947.
http://www.michiganvotes.com/Legislation.aspx?ID=61339

According to Rep. Mayes (D -Bay City) website, the legislation,
will establish a competitive process for Michigan communities to apply for district designation, based on arts- and culture-centered neighborhood redevelopment plans. Districts would be able to take advantage of any combination of incentives based on their particular community's needs, including:

• Income tax deductions of up to $25,000 for working artists who live in the district.
• Income tax and Michigan Business Tax (MBT) incentives for property taxes incurred for properties rented or used for artist housing, gallery space, or other arts and culture uses.
• A philanthropic state tax credit for individuals and businesses who donate to nonprofit organizations operating within cultural redevelopment districts.
• A special MBT (Michigan Business Tax) incentive for development projects within cultural redevelopment districts.
• A sales tax exemption for art work or artists' materials sold within a cultural redevelopment district.

I've always said that the beauty of local music (or any local art for that matter) is that it can't be outsourced. What do you think? Could this help the local economy in say, Detroit? Would you be encouraged to make a go of it in a "cultural redevelopment district" if you, basically, didn't have to pay taxes? Do poor artists even think in terms of tax breaks?

Groupie Joined: Nov 15, 2007 Posts: 63

This seems to be slanted to a particular narrow geography, namely to some old downtown of a major metropolitan area. (Lansing's Grand River Avenue at the very bridge of the Grand River itself comes to mind.) It also goes with the assumption that artists that would nurture such a place would of course be renters, and would love to live in this very particular section of town.

I dunno, sounds noble in what it's trying to do, but I'm not sure there'd really be many takers. The devil's in the details: Would these artists be CAREER ones, or would those that do this as a secondary thing also qualify?

It's clearly trying to force a charming Bohemian area of a city to entice folks to keep cities from the "center-rot" phenom going on in American cities right now. Would the market bite? Would people drive in from the outer 'burbs and spend time and money in such a place; "Build it and they will come"?... Are both artists and the city best served by this marking off of a territory for all this?...

I'm no sociologist, but I'm not sure this is really the way to make that vision happen. How do cool cities like Seattle, Austin and Cambridge do it? (Cynical as hell, I suppose, but I really think the government would botch up the model analysis required here; It's more about how the proposal LOOKS as opposed to if it will actually work or not...) And, if it is a particular city challenge, isn't this best attacked with city government?...

Art and government never have historically mixed well, so pardon my pessimism...

Posted: Tue Apr 15, 2008 5:56 am

Gene wrote:

I dunno, sounds noble in what it's trying to do, but I'm not sure there'd really be many takers. The devil's in the details: Would these artists be CAREER ones, or would those that do this as a secondary thing also qualify?

According to the text...
...."artist" and "artistic work" mean those terms as defined in the cultural redevelopment district authority act....

Here's a link to that: The Cultural Redevelopment District Authority Act - HB 5947 - http://www.legislature.mi.gov/documents/2007-2008/billintroduced/House/htm/2008-hIB-5947.htm

Here's some pertinent text:
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 1. This act shall be known and may be cited as the
"cultural redevelopment district authority act".

Sec. 2. The legislature of this state finds and declares that
there exists in this state continuing need for programs to assist
certain local governmental units in encouraging cultural
development, cultural redevelopment, economic development, the
consequent job creation and retention, and ancillary economic
growth in this state. To achieve these purposes, the legislature
determines it is necessary to assist and encourage the creation of
cultural redevelopment districts and provide temporary relief from
certain taxes within those districts.

Sec. 3. As used in this act:

(a) "Artist" means a person who creates or executes an
artistic work.

(b) "Artist materials" means materials used directly in the
creation of artistic work that are for sale or purchased within the
district.

(c) "Artistic work" means an original and creative work,
whether written, composed, created, or executed for one-of-a-kind
or limited production, which is 1 of the following:

(i) A book or other writing.
(ii) A play or the performance of a play.
(iii) A musical composition or the performance of the
composition.
(iv) A painting or other like picture.
(v) A sculpture.
(vi) A traditional and fine craft
(vii) The creation of a film, the acting of a film, or
photography.
(viii) The creation of a dance or the performance of the dance.
(ix) A design art.

So, it says what an artist is, but I haven't found the part about how much art needs to be produced to get the tax break. I think it depends on the sale of that art.

Sec. 9. An artist who is a resident of or conducts business in
a district or a qualified business that is located and conducts
business activity within a district shall receive the exemption,
deduction, or credit as determined by the board as provided in the following for the period provided under section 7(2)(b):

Sounds like you need approval from the "cultural
redevelopment authority board" to get the designation:

(d) "Authority" means the cultural redevelopment district
authority created in section 4.

(e) "Board" means the board of directors of the cultural
redevelopment authority board created in section 5

Yup, sounds like you need approval from the local "Ministry of Art". I can already imagine the battles that will take place over approval/disapproval and what metrics they might use in determining who gets approved and who doesn't - regardless of the definition of art in the bill.