Tag Archives: music business

Traveling Musician

Avoid Border-Crossing Gear Glitches with an ATA Carnet

by Anya Craig, Membership Services Administrator, Canadian Federation of Musicians

It’s the stuff of nightmares for the travelling musician: you’re headed out of the country for a big show, your precious instrument in hand, but when you get to the border, you’re gruffly told that you can’t bring your gear across—not without a bunch of hassle and some hefty fees, if at all!

Performing outside of Canada can be a headache; securing work permits and negotiating with purchasers abroad isn’t always a picnic. The last thing a musician needs, after wading through the process, is to be barred from entering your destination country with your gear.

This sort of gear-related border issue is becoming more common, unfortunately, and although veteran border-crossers know to bring a detailed manifest of all their instruments and accessories, some border agents will only accept one kind of gear documentation: the ATA carnet.

The ATA carnet is an internationally recognized customs document that acts as a sort of passport for all your professional tools. It is your best defense against the stickiest of border officers, who are typically trained to assume that anyone entering their country with gear intends to sell it and abscond with the profits. The carnet proves that your instruments and gear are the tools of your trade, and that they will be brought back to Canada with you after your gigs.

The ATA carnet program was established in 1961 by the World Customs Organization, and is accepted in 71 countries worldwide, including the US. Here in Canada, the carnet is issued by the Canadian Chamber of Commerce. When you travel with a carnet, your goods are inspected every time you leave or enter a country and you escape the potential hassle of having to pay duties or temporary importation bonds on your professional gear. In some cases, travellers have been denied entry until a valid carnet could be produced.

Getting the carnet is not particularly difficult or time-consuming as long as you are able to provide detailed information about the instruments and gear you intend to travel with. Along with the application, certain fees are required, which are based on the total value of your tools. The Chamber of Commerce asks applicants to allow five business days for processing, but three-day or even same-day service can be had for an extra fee. After the carnet is issued, it must be validated by Canadian customs, which can be done any time prior to your travel date or on the day you cross the border—just be sure to leave home extra early if you choose the latter option. Once you’ve got the carnet, it’s valid for a year. After a year, you will need to reapply.

You may grumble at the prospect of having to fill out yet another application in order to perform outside of Canada. You may wonder if an ATA carnet is really necessary, especially if you’ve taken your gear across borders successfully without one. Your best bet, if you’re planning on travelling across the border, is to call up the foreign port of entry where you intend to enter and ask them what their policy is. Different border stations have different ways of dealing with gear and goods. If the agent you speak to is not clear about their expectations, or if you’re in any doubt, obtaining a carnet is your best option to avoid disappointment. Keep in mind that the border agent you encounter when crossing may not abide by what you were told over the phone by another officer; another agent may insist on a carnet, regardless of what their colleague told you.

However you choose to document your gear when crossing the border, make sure you’re confident in your choice, and err on the side of caution. Doing paperwork and paying fees may be a hassle, but it’s vastly preferable to missing your gigs because it was barred entry, or spending hours at customs tied up in red tape. As a musician, you’ve got better things to do!

If you’re interested in obtaining an ATA carnet for future travel, visit the Canadian Chamber of Commerce’s Carnet Services site: http://www.chamber.ca/carnet. A list of countries that accept the ATA carnet can be found at: http://www.chamber.ca/carnet/carnet-countries/. To get the contact information for US ports of entry, visit the US Customs and Border Protection site:  http://www.cbp.gov/contact/ports.

Organizing

Revised Notice to Musicians Employed Under US Collective Bargaining Agreements

Sections 8(a)(3) and 8(b)(2) of the National Labor Relations Act permit unions in non-right-to-work states to enter into collective bargaining agreements with employers that require employees, as a condition of employment, either to join the union (and thereby enjoy the full rights and benefits of membership) or to pay fees to the union (and thereby satisfy a financial obligation to the union without enjoying the full rights and benefits of membership). That requirement serves the legitimate purpose of ensuring that each employee who benefits from union representation pays a fair share of the cost of that representation. The goal of such “union security provisions” is to eliminate “free riders” who benefit from the union contract without contributing to the union’s cost of negotiating, administering, and enforcing that contract.

Where a collective bargaining agreement requires an employee to either join the union or to pay fees to the union, the fees charged to nonmembers are generally identical to the amount of union dues and initiation fees charged to union members. In a 1988 court case, Communications Workers of America v. Beck, the United States Supreme Court held that a nonmember has the right to object to paying any portion of the fee that will be expended on activities unrelated to collective bargaining, contract administration, or grievance adjustment. All nonmember fee payers are required to pay the portion of the fee that will support expenditures germane to the collective bargaining process, including, but not limited to negotiations, contract administration, grievance adjustment, meetings with employer and union representatives, legislative matters affecting the working conditions of employees in various industries in which musicians function, and internal union administration and litigation related to the above activities. Nonmember fee payers who object to doing so have the right not to pay the portion of the fee that will be expended on other, “nonchargeable” activities, including expenditures made for political purposes, for general community services, or for members-only benefits. In order to reduce the fee they pay to the union, objectors must follow the procedure described here.

The so-called Beck rights described above apply only to nonmembers—individuals who have resigned from the union or who have never joined. Under federal labor law, every person has the right to join and support a labor union, to refuse to join a labor union, and to resign from union membership at any time. However, only union members have the following valuable rights, among others: the right to attend local union meetings and speak out at such meetings on any and all issues affecting the local, the AFM, and its members; the right to participate in the formulation of union policy; the right to influence the nature of the local’s activities and the direction of its future; the right to nominate and vote for candidates for local office and to run for office; the right to participate in the negotiation process for new or successor collective bargaining agreements; the right to participate in contract ratification votes and strike votes; the right to nominate and vote for delegates to the AFM Convention; and the right to participate in a wide variety of benefit plans offered to union members, including the Union Privilege benefits programs, the AFM Symphony-Opera Orchestra Strike Fund, the AFM Theater Defense Fund, and the ROPA Emergency Relief Fund.

Objection Procedure

1)   Any nonmember who pays fees to the union pursuant to a union security provision in a collective bargaining agreement has the right to object to any portion of the fee that will be expended on activities unrelated to collective bargaining, contract administration, or grievance adjustment. Fees (like union dues) paid by musicians to AFM locals consist of various parts. All member and nonmember fee payers contribute a per capita amount to the local, which the local, in turn, pays to the AFM. They also pay an annual fee that is retained by the local. In addition, musicians may pay a percentage of their earnings (work dues). The exact percentage, and whether it is ultimately payable to the local or to the Federation, depends on the collective bargaining agreement, and the type of work involved. Based on an analysis of the Federation’s 2007 expenditures, in excess of 83.74% of the Federation’s expenditures were for chargeable activities such as collective bargaining, contract administration, or grievance handling. The percentage of local expenditures that are chargeable typically is higher (and the percentage of local expenditures that are nonchargeable typically is lower).

2)   The objection must be in written form, signed by the objector, and sent to the local union(s) where the objector would have paid his or her dues had he or she been a member. The local(s) will forward a copy to the International Secretary-Treasurer Sam Folio; American Federation of Musicians; 1501 Broadway, Suite 600; New York, NY 10036. The objection must contain the objector’s name and address, and must identify the collective bargaining agreement(s) under which the objector works and the local(s) to which the objector pays fees.

3)   The objection must be postmarked between February 1 and February 28, or within 30 days of the objector’s becoming a nonmember of the union, or the objector first being required to pay fees to the union.

4)   Each local union will determine the amount of the reduced fee and the amount, if any, of prepaid fees to be refunded to the objector, except that the Federation will determine the reduction and refund applicable to any prepayment of Federation per capita. The reduction will be accompanied by an explanation of how the reduction amount was determined. Any objector who disagrees with the reduction amount can file an appeal. The appeal procedure will be provided to objectors together with the reduction check. The appeal must be in writing and state the basis for the challenge. Appeals will be decided by an impartial arbitrator appointed by the American Arbitration Association through its Rules for Impartial Determination of Union Fees.

5)   The local and/or the Federation, as appropriate, will provide further information to an objector regarding the reduction of any work dues.

—Further information regarding the objection procedure can be obtained by writing to: International Secretary-Treasurer Sam Folio;
American Federation of Musicians; 1501 Broadway, Suite 600; New York, NY 10036. Please remember that this notice is not applicable
to musicians who are not required to pay union fees as a term or condition of employment under a collective bargaining agreement.

Traveling Musician

Dealing with Foreign Sales Tax

by Robert Baird, President Baird Artists Management (BAM!)

My column “Getting Merchandise Across Borders” (October 2014 IM) prompted some questions on dealing with the sale of merchandise once you’ve gotten it into the country. We all know about “under-the-table” sales, but we should also be aware of the regulations regarding tax on merchandise—sales tax or “use” tax. All jurisdictions have regulations regarding the collection and remission of sales tax and you need to know what is required of a nonresident federally, as well as in each state, province, and even in cities. Collecting and remitting taxes are the responsibilities of vendors, so as a self-employed musician, you need to be aware of tax regulations and how to deal with them.

Dear Crossing Borders,

If an artist is selling promotional merchandise at his shows, does he need to charge tax to the buyers? If so, are the regulations different if the merchandise was produced in the United States, as opposed to Canada. Are there any special rules to follow when claiming income from selling the merchandise on your taxes?
Taxed to the Max

As Benjamin Franklin once wrote: “In this world nothing can be said to be certain, except death and taxes.” And for any musician, especially a travelling musician, trying to sell merchandise, finding out about taxes can be daunting. The general rule is that sales tax must be collected on every sale to the ultimate consumer. However, each jurisdiction is different and there may be no sales tax applicable, or there may be exceptions for nonresidents.

First of all, you must determine if there is a sales tax. In the US, there is no general national sales tax. Sales tax is levied at the state (or lower) level. There are five states that do not charge sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. Unfortunately, some localities within these states may charge sales tax and you may have to do a little research to check if there is an applicable local tax. Information on state sales tax can also be found by looking at each state’s website. You can find links at: http://www.usa.gov/Agencies/State-and-Territories.shtml.

In Canada, there are two levels of sales tax: federal and provincial. The federal and provincial sales tax rates are combined (harmonized) as HST in Ontario, New Brunswick, and Newfoundland and Labrador (13%), Prince Edward Island (14%), and Nova Scotia (15%). In the rest of Canada, the federal sales tax (GST of 5%) and the provincial sales tax (PST) are collected separately. Registration for GST/HST is voluntary and, depending upon your level of business activity in selling merchandise, you may want to consider registering.

Secondly, you have to determine if you are required to collect sales tax at all as a nonresident. In most jurisdictions in the US, out-of-state sellers do not need to collect sales tax, unless they have a “nexus” or presence in that state. A nexus means that you have a store location in a state, inventory held within that state, or employees or affiliates who live or work in that jurisdiction, visit customers, or attend trade shows. If you have an established nexus, you do need to register as a retailer and get set up to collect sales tax.

However, nexus rules vary from state to state and some states or areas may require that you collect sales tax without a nexus. If the vendor has no nexus within the jurisdiction then “use” tax (self-assessed sales tax) becomes the responsibility of the consumer/purchaser. However, some jurisdictions may require the vendor to collect and remit this tax.

In Canada, if a nonresident vendor has no business presence in the country, then the collection of HST/GST is not required. However, several provinces recommend that nonresident vendors register voluntarily, either provincially (PST), federally (GST), or both (HST). More information can be found at: http://www.cra-arc.gc.ca/E/pub/gp/rc4027/.

Rather than ignoring the issue, musicians need to research sales tax and deal with the specific requirements in the jurisdictions in which they will be selling merchandise. If you are selling merchandise at a trade show, or in connection with a performance at a venue or event, the trade show, venue administration, or event organizer should be able to assist you in doing this. Knowing about sales tax and how to deal with it are two necessary skills for artists crossing borders.

Finally, to answer the other questions posed: sales tax regulations are the same whether the merchandise was produced in the US or in Canada, and there are no special rules to follow when claiming income from selling merchandise, except one: do claim the income.