Published on August 25th, 2016 | by Amber Healy1
Chicago Tax Bill Says Rap, Rock, Country not “Art”
Chicago, a hub to musicians of all genres and a cornerstone of the jazz and blues worlds, might be taxing its music scene to the brink of death.
A slight exaggeration, perhaps, but not a stretch: A municipal tax being levied on concert halls doesn’t consider rap, rock, country and DJ performances to be “fine arts” and, as a result, those performances would be taxed, while others, like opera and philharmonic concerts and theatrical plays, would be exempt.
The Chicago Reader broke the story last week, explaining that for the past decade, the city has been working to collect an 8% tax on DJ performances from several venues across the city because they didn’t meet the exemption established in a county code. The regulation says venues with a capacity of 750 or fewer people are exempt from a 3% tax on cover and ticket charges as long as the admission fee, whatever it is, are for “live theatrical, live musical or other live cultural performances.”
In 2006, Chicago’s Department of Revenue determined that DJs should be classified as a live performance and should be exempted from the tax “as long as the performances substantially add to or modify prerecorded material through ‘technical manipulation, singing, speaking, dancing or other activity,’” the Reader reports.
Now the county is picking up where the city left off and is trying to collect more than $200,000 in back taxes from six or so small venues around Chicago, arguing that the clubs never should have been exempted from the tax as the entertainment staged there is not, in fact, a live cultural performance.
The venue owners are concerned they’d be driven out of business, either by having to pay back taxes from the past six years or by being subjected to increasing tax bills going forward. Small venues are the lifeblood of many bands and musical genres: small clubs are where pretty much everyone, regardless of style or instrumentation, starts out.
According to Pat Doerr, president of the Hospitality Business Association of Chicago, the venues facing tax bills have been hiring attorneys to help them fight the battle against the county.
A representative for one of the clubs in question, Beauty Bar, told the Reader that the venues being targeted regularly have DJs and electronic music shows on the calendar. Doerr and others affiliated with the venues “all say that during the administrative hearings a Cook County hearing officer claimed that rock, rap and grunge should also not be considered ‘fine art’ by county standards. The comments set off alarm bells for (venue owners and managers), who say they’re concerned that other venues in which they have a stake…will soon be targeted for amusement-tax collection by the county.”
Bruce Finkelman, a managing partner in the development group that owns Beauty Bar, is perplexed by the county’s goal. “I can’t figure out what is more offensive here, that [Cook County] is trying to go back on something the city ruled exempt years ago or that the music we’ve been presenting in the city for 25 years is not thought to be cultural or enriching,” he told the Reader.
The Chicago Tribune adds that venue owners and managers are arguing their establishments should be considered exempt due to their size, which falls below the 750 maximum cited in the ordinance.
Matthew Ryan, an attorney representing Beauty Bar, intends to bring a DJ to the next hearing, scheduled for October.
“This seems to be the argument they made against Elvis Presley and The Beatles: that it’s the devils music,” Sean Mulroney, an attorney representing Evil Olive, another venue facing a six-figure tax bill, told the Tribune. “This is just the evolution of modern music. It’s technology and music combined.”
At least one county commissioner told the Tribune he wants to eliminate the confusion by making the county and city policies match and use the same definition of musical performances to provide some clarity on which venues are responsible for the tax.
In an op/ed piece published Tuesday, the Tribune said the county ordinance “appears to define music as a genre that stopped evolving past 1949. It says the exempted performances are ‘part of the fine arts, such as live theater, music, opera, drama, comedy, ballet, modern or traditional dance, and book or poetry readings.’ No contemporary music genres are mentioned.”
One county commissioner told attorneys representing the venues they would be “hard-pressed to prove that the…commissioners meant for rap music to qualify as the fine arts. None of the definitions that I’ve come across have included the activities of DJs doing what they do as fine art,” and suggested they bring in a musicologist in addition to a DJ.
The editorial board goes on to say that “as Chicagoans we know how steeped our city is in modern musical culture, which makes this debate downright embarrassing. Chicago is a birthplace to the blues, it’s a jazz capital, hometown to some of the world’s greatest rappers and most influential indie bands. This is also, ahem, the city that gave its name to Chicago house music, the pioneering 1980s effort by local DJs like Frankie Knuckles to turn mashups of disco, funk and other grooves into a new genre of nightclub performance.
“Each of those musical styles, including DJ’ing, represents a cultural experience and deserves the same encouragement and tax treatment as does a theatrical drama or classical concert,” the piece continues. “Some musical artists write and play songs on traditional instruments; performance DJs create danceable tapestries of sound.”
County Commissioner John Fritchey, who tells the Reader this week that he frequented many clubs and small venues in his younger days, said the tax code language “harkens back to the days of the 1950s when rock ‘n’ roll wasn’t considered music. No pun intended, but I think the county is being tone deaf to recognize opera as a form of cultural art but not Skrillex.”
We’ll certainly be keeping a close eye on this story as it develops and will post updates when possible.