But I didn't know where else to post this. Perhaps some moderator will find it a better home.

From CNN today http://money.cnn.com/galleries/2010/news......s/2.html :

Lawmakers in Maine are going after children's entertainment to make a little extra money for the state.

A bill proposing a 5% state tax on a slew of things, including comedians, clowns, jugglers, ventriloquists, petting zoos, paintball and even haunted hay rides will be voted on this summer and would go into effect in January 2011.

"People make fun of the bill, saying we're taxing clowns and that kind of thing, but that's not the way to look at it," said Maine House Majority Leader John Piotti. "It's a comprehensive change and we're doing it in a very smart way."

But purveyors of such services are afraid their profits will disappear. Angelique Steelgrave, who works with her husband as a full-time magician, said that this tax will have a huge impact on small entertainment businesses like hers.

"We hate the idea," she said. "Not a lot of businesses these days have the luxury of raising prices 5%, and in a lot of cases, this could be a serious amount of money we would either have to charge clients or eat ourselves."

Small businesses of all kinds just have zero clout when it comes to legislation like this. We don't write big dollar checks to politicians. We can't afford big money
lobbyists to promote our issues.

This is exactly the kind of nonsense you get when we elect people to public office who have NEVER RUN A BUSINESS.

Grrrrrr....

--Jack Turk

Will the clowns in the Maine legislature be paying the same tax?

Jackturk, I wish electing politicians who had run a business would solve this problem, but that doesn't work either. Denver elected a bar owner as mayor who then went on record as supporting legislation that significantly hurt bars across the whole state of Colorado, putting many small or family-owned ones out of business.

North Carolina is also considering a tax on services excluding doctors and lawyers (imagine that) and including party entertainers. I've carefully avoided anything that requires a sales tax permit to keep clear of the bureaucracy. Seems as though they're determined to snare us all.

In Canada, you have to charge tax (GST) on your services if you earn more than $30K as an annual income. If you are below $30K, you have the option of doing it or not doing it.

When you charge the tax, and pay it along to the government, you also get refunds from the government on tax that you paid on purchases for your business.

I recommend that you talk to your accountant for further information.

The new complication is the harmonizing of provincial tax (PST) and federal tax (GST) here in B.C. into one tax (HST).

- Donald

Just how does the state of Maine plan to regulate this cash business?

Michigan is about to impoose an 8% Tax Fee on just about every service that you can imagine. So your Maine 5% is nothing, lol.

RJ

Actually, the Maine tax legislation was passed in June of 2009 but due to a petition drive that new law has become the subject of a state-wide referendum that will be held on June 8, 2010.

The 2009 legislation, in part, expanded Maine's sales tax to include the following services: (1) amusement, entertainment, and recreation services; (2) installation, repair, and maintenance services; (3) transportation and courier services; and (4) personal property services.

The expansion of the sales tax base (as well as other sales tax changes) was accompanied by changes to the Maine personal income tax (including moving to a flat 6.5% rate with a 0.35% tax surcharge imposed on income over $250,000)and changes to the property tax which were touted as lowering the total (sales and use, income and property) taxes for a vast majority of Maine residents.

The June 8, 2010 referendum asks "Do you want to reject the new law that lowers Maine's income tax and replaces that revenue by making changes to the sales tax?" If the referendum fails (i.e. people vote NO so as NOT to reject the legislation), the 2009 legislation would become effective January 1, 2011.

As Skip Way and TMORP point out, a lot of states are looking to increase tax revenue's to help them deal with current budget problems. One method is expanding the sales tax base to cover all types of services, including entertainment.

To answer's Al's question about how the states will regulate cash businesses, the answer is that they cross check the information provided on your federal and state tax returns. The states have access to the information on your federal tax return. If you report your business income and deductions on your federal tax return and you are identified as a business that is required to collect sales tax, the states will cross check to see if you have registered for sales tax and if you've been collecting it on your shows.

Like Skip, I also love the ease of doing business without all sorts of government intervention. This Maine law sounds like the type of thing that quells small business growth. If they thought it through, its not unreasonable to see this actually lowering the amount of taxes being brought in. As entertainers and other like service providers have to charge more to pay the tax, people will balk at the cost and the amount of shows booked will generally decrease. If revenue is down, then so is the amount that can be taxed. It's a lose-lose scenario.

Here's a wild idea. How about the government just lowing its spending? Stop regulating and let business do what it needs to do in order to make a solid profit.

The solution is simple. When they try to collect the "entertainment" tax tell the tax collector "Ever seen my act? It's far from entertaining". thus your exempt from taxation.

If my State Passes such a law I'll have to start paying taxes as well. I'll just pass the cost on to my customer. We have a sales tax here so people are used to that sort of thing so it shouldn't hurt bookings. Just the cost of doing business.

Once the economy picks up of the big boys like Exxon start paying their fair share these nickel and dime taxes should come to a stop. Especially after they figure out it cost more to administer than they are taking in.

I can't wait till the first sting operation where they set up a fake birthday party to nab a clown or a balloon twister for not charging a service tax. That'll make some interesting headlines.

Scott

Exactly right. Sometimes I wonder if those in government who make up these tax laws ever study history. Or perhaps they don't care?

In reality, a tax on business is simply a tax on the consumer since most taxes are added into the price. In many cases, more regulation leads to lost revenues, which is then blamed on lack of regulation, which leads to more regulation and more lost revenue...and the circle continues.

Thankfully, my faith is not in the policies of the politicians...

Good day to all.

andrew

Payne wrote...
"The solution is simple. When they try to collect the "entertainment" tax tell the tax collector "Ever seen my act? It's far from entertaining". thus your exempt from taxation."

You won't get away with that.

I've seen your act.

andrew

RealityOne
Thank you very much.

The US I just don't get it. I totally understand why you need this tax, your govt spends waaaay more that it earns. Taxing more aint gunna fix anything.

Why don't they just get it over with and take a 100% income tax. You know that's what they'd like to do. Then the government would have enough money for all kinds of programs to help out the poor citizens of America (who would then be everyone) get food and clothing and pursue happiness.

In a way, it would be like a great big happy commune. I think there's a name for a system like that, but it escapes me at the moment.

The one lesson that I draw form this thread is always fly under the radar. Please do not ask me to explain just read between the lines.

Rule #1 - Never Mess with the IRS - Pay unto Caesar and all that. These people play for real and they can put a major hurting on your life without worrying about minor little things like "Due Process" and "Innocent till proven guilty..." I don't give Th' Man any reason to be looking my way...especially with these money-hungry, pocket-pickin' politicos in office. Keep hiding that cash, amigo, and sooner or later Big Brother will find you in his sights.

The way to beat them is by voting wisely, not cheating. Our primaries are polling today. How many of you have researched your candidates and voted? (Rhetorical question that.)

Rule #1 when I was a kid was always play fair. I don't like paying any taxes, but I do pay all that is required of me. It's the law, and we live under the 'rule of law'.

Skip, I like you're thinking. Voting -- wisely-thought-out voting is the key. In the US we get the leaders we deserve.

Can you not write off this tax in your schedule C "expenses" on you "income tax"?