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Chad Swiatecki is a 20-year journalist who relocated to Austin from his home state of Michigan in 2008. He most enjoys covering the intersection of arts, business and local/state politics. He has written for Rolling Stone, Spin, New York Daily News, Texas Monthly, Austin American-Statesman and many other regional and national outlets.
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Music venues could see liquor tax relief under proposed state laws
An Austin-based live music advocacy group has helped with the creation of two bills up for consideration in the Texas Legislature that would provide rebates on liquor tax payments to music venues across the state.
House Bill 2806 was presented Tuesday to the House legislative committee on Culture, Recreation and Tourism and is expected to go up for a vote to move out of committee next week. If the bill makes it to the House floor and wins approval, the group would then introduce a similar bill (Senate Bill 1832) in a Senate committee and follow a similar path. If approved in both chambers it would go to Gov. Greg Abbott for a final signature.
Submitted with the name Texas Music Incubator, the bills are intended to provide economic relief to music venues in major cities in Texas where rising land prices are cutting into the already thin bottom line of clubs where presenting live music is a major component of the business model.
There have been similar efforts in previous legislative sessions to provide some kind of tax relief for venues, with a 2013 bill from former Austin House Rep. Mark Strama failing to move forward because the broad definitions of what constituted a music venue would have potentially cost the state more than $100 million from its total liquor tax revenue pool.
As currently designed, the legislation would provide rebates to about 360 music venues across the state, using a criteria framework created by the Music Venue Alliance Austin, which is working to enact business-friendly laws for music venues.
That set of criteria, which were developed in part for inclusion and possible zoning considerations in Austin’s CodeNEXT rewrite, says that to qualify as a live music venue a business must meet five of eight requirements, including having dedicated staff for sound engineering, booking live acts a minimum number of days per week, collecting an admission price, and conducting basic marketing of live music concerts.
Proponents of the rebate plan were careful to find sponsors outside of Austin – Republican Rep. Geanie Morrison in the House, and Democrat Sen. Carol Alvarado – to make the bills appear to be less Austin-centric. Tuesday’s testimony included discussions about how the rebates could serve an economic development function to help small clubs and venues in smaller towns bring in larger acts and make improvements to their businesses to create new revenue.
The actual percentages and numbers involved will likely change as the bills move forward, but it is expected the total pool of money set aside for the rebates will be about 2 percent of the roughly $500 million in liquor taxes collected by the state annually. Still to be decided is how the state would determine the amount of rebate given to individual businesses, with the possibility of a tiered system based on the amount of liquor tax paid to the state to keep the state from having to add accounting personnel.
Rebecca Reynolds, executive director of Music Venue Alliance Austin, said the early positive reception to the House bill suggests state lawmakers see the value in preserving music venues across Texas.
“They realize we also have music venues in rural areas as well as city centers that face different challenges, and it’s likely that the money received by those in smaller towns will go much farther and have a bigger effect,” she said. “It was important that this not come across as a subsidy, but something that would help these businesses to right-size their business model.”
Reynolds’ group has worked behind the scenes for much of the past year to conceive and build support for the legislation, with tourism, restaurant and hospitality groups lending their support and guidance where needed. Lobbying efforts for the legislation are being handled by Austin-based Cross Oak Group.
“We’re trying to address the money crunch on Texas’ live music venues and the artists that make their livings in them,” said Jim Dow, managing partner of Cross Oak Group. “And we believe that the Legislature understands this opportunity to preserve the rich musical heritage of our state.”
Photo by OpalDivine [CC0], via Wikimedia Commons.
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