Rosie Poppins wrote on May 6
th, 2009 at 8:50am:
The Childrens Theatre wrote on May 6
th, 2009 at 12:42am:
�
Those theatre companies that are sending out 1099's are doing so at the risk of the State auditing them.
Why?
I've had several companies (not theatres) where I was hired as an independent contractor to do office/assisting work for a short time. �Those companies (2 international/huge, 1 local/small) then sent me a 1099 and I was advised by a tax professional (love those lawyers) that because I was paid in this manner, I could operate my own 'business' and claim the expenses. All 3 amounts were over $600, and I always put them on my tax forms. Should the state be auditing those companies for my being paid via 1099? I didn't start out with the intention of operating a business, but I was just fine with accepting a 1099. �I'm just saying, it doesn't happen in ONLY the theatre world...
(I do get it that no corporation would ever ask for volunteers or be allowed to pay someone .10 cents an hour to work. �Please don't try to detract from this point with that separate, worthy argument. �I just genuinely want to understand why paying someone 1099 merits audit in one realm of business and not another.)
Midsize theater groups facing fines from state
By not classifying actors, others as employees, companies have avoided hefty salary payments, taxes
By REBEKAH DENN
SEATTLE POST-INTELLIGENCER REPORTER
Shakespeare won't be on the playbill when Kent Phillips finishes plans for his theater group's next season. Instead of a 15-player production of the Bard's "Richard II," he is looking into a two-man show by Noel Coward.
Phillips, interim director of the Tacoma Actors Guild and managing director of Bellevue Civic Theater, didn't pull his Shakespeare plans for artistic purposes. He was reacting to news that the state has been auditing other theater companies and fining them for paying actors honorariums and stipends rather than treating them as full-fledged employees.
The state says it is not cracking down on theaters or singling them out, but the artists say that makes no practical difference.
"I'd rather be safe than sorry," Phillips said. And dropping from a 15-person to a two-actor show in Tacoma, with a similar reduction in Bellevue, would cover his company's extra costs for the season if the entire industry must change how it pays for its art.
At least three theater companies in the region say they are facing fines from the state Employment Security Department. And dozens of others -- along with the broader arts community -- are worrying about what the change could mean.
"This is one that could have a real detrimental effect, not just in Seattle but across the state. And it might not just be theater companies, it might be all kinds of venues," said Gretchen Johnston, executive director of the Washington State Arts Alliance, a non-profit advocacy group that will start examining the issue at a meeting today.
"The implications are far beyond the theater community. It will cost everyone more," said Karen Zeller Lane, executive director of Theater Puget Sound, who said other theaters have faced audits as well. "You look at musicians. Dancers. Festivals. ... What about the church soloist?" she said.
Similar issues at symphony orchestras in Oregon over the past few years have caused music festivals to be canceled or cut back, according to the Statesman Journal in Salem.
At issue is the practice among small and midsize theaters to treat some actors, technicians and designers as independent contractors rather than as employees. Theater directors say paying a fixed payment or weekly stipend is a way to honor and at least slightly subsidize their creative work -- and provide a stepping stone to higher-paid Equity jobs -- without completely breaking the bank for community non-profits.
Now, they say, the state is telling them that workers should be classified as employees, meaning they should pay an hourly salary of at least minimum wage, plus contribute to the state's unemployment and workers' compensation funds.
"From an actor's standpoint, they're going to be more protected," said Lauri Watkins, managing director of Theater Schmeater.
But it could harm them as well.
Seattle has a long tradition of being a "theater town," but it has taken a hit over the past few years as community theaters have struggled to stay in business. The Empty Space Theater and ACT Theatre, for instance, threatened shutdowns recently before emergency fund-raising drives kept them afloat. Several smaller theaters have shut their doors for good.
With different employment rules, "in a worst-case scenario, you might eliminate 50 percent of the theaters in town," Watkins said.
Theater Schmeater currently pays actors $100 apiece for participating in a show, including rehearsal time, Watkins said -- not much, but at least a way to show they value what's being done. To reclassify actors as employees "would probably end up something like quintupling our budget."
To keep functioning, the solution instead for such small companies might be "to just classify everyone as a volunteer and not pay them at all. That doesn't serve anybody," she said.
Sharon Hitt, employment accounts manager for the state Employment Security Department, said yesterday that the theaters in question were audited randomly. "The fact that they are theaters bears no relevance to the process," she said, and as far as she
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