This month, Triangle ArtWorks is bringing you THREE events aimed at providing you the information you need to succeed AND meet other artists from across the Triangle. Check out these events and REGISTER!
Law + ArtWorks Workshop on “Fair Use”
February 22, 2017 | 7:00 PM @ RTP Frontier Building|Classroom
Fair use is a legal doctrine that *sometimes* allows for copyrighted works to be used by others without a license and without legal liability. Bring your questions and your experiences, as the lawyers will lead an open discussion on the most recent state of the law, as well as how the law
affects your work.
See more information and register here
Law + ArtWorks workshop “Legal Issues in Comedy”
In conjunction with NC Comedy Arts Festival, Law + ArtWorks is presenting a legal workshop on issues affecting comedy arts – Free speech, slander, copyright, performance agreements and more!
February 17, 2017 | 5:00 PM @ DSI Comedy Theater
TEAL Lunch & Learn (Triangle Emerging Arts Leaders)
Join us to hear about the dynamic resources provided by the North Carolina Arts Council. Sharon Hill, Director Arts in Education, and Jeff
Pettus, Senior Program Director, will be joining TEAL for lunch to share information and answer your questions about NC Arts Council’s mission, artist opportunities and community resources and services.
February 24, 2017 | 11:30 AM @ RTP Frontier Building | Dive Conference Room
Tags: DSI Comedy Theater, Fair Use, NC Arts Council, NC Comedy Arts Festival, TEAL, TEAL Lunch & Learn, Triangle Emerging Arts Leaders
Law + ArtWorks – that group of local lawyers that works on Triangle ArtWorks network to provide legal education and resources for the Triangle – is kicking off their new year (well, fiscal year) with a new focus as Triangle ArtWorks first “Resource Group” and wants to tell you about it over a cold one!
Join the lawyers of Law + ArtWorks for drinks, snacks and a little “legal mingling” at WXYZ at the new Aloft Hotel on Hillsborough Street in Raleigh at 6pm on Wednesday, September 21.
Help us plan better by signing up for this event here.
Last year, a bunch of arts loving Triangle lawyers were looking for a more efficient and effective way to help the Triangle arts community and help them get the legal information they need to run their businesses and protect their work. They began working with Triangle ArtWorks, set up Law + Artworks, and began a series of Practicums – practical workshops aimed at helping artists understand issues such as how to read a contract, what Fair Use really means, or how to file a trademark application. They also began looking at other ways to support the Triangle’s artists and arts organizations.
This (fiscal) year, they are “rebranding” as a Triangle ArtWorks first “Resource Group” – go-to group for arts organizations and discipline groups for general legal support. They will still be doing their monthly Practicums, often working directly with arts discipline groups across the Triangle. They will also be working to build the Legal Resources for Artists database on Triangle ArtWorks site and to develop other simple tools, such as pamphlets and guides, that artists can access directly from the Site.
Need a lawyer to talk to your business or arts organization about a general legal issue – contact them. Does your arts discipline share a general legal concern that they want input on? Contact them. By bringing together lawyers that support the arts community, we are making it easier for them to work together to increase legal resources for artists and for arts groups to be able to find legal speakers and other support.
Of course, Law + ArtWorks will not be able to represent artists or organizations directly on specific cases. If you need to hire a lawyer, check out our Creative Services section to find lawyers who love working with artists.
If you are a lawyer that loves the arts, but struggles with how to be of help, join our Resource Group! We are expanding the group to provide more tools and services. All areas of practice are needed! Come to the Happy Hour or contact us here.
We are glad you asked! Yes, ArtWorks will be working with other professional groups (Accounting? Real estate? Marketing?) to create more Resource Groups to work through ArtWorks regional network to help the Triangle’s arts business community get the resources they need more easily. Have an idea for our next Resource Group? Let us know!Tags: ArtWorks Legal Resource Group, Brandon Huffman, Ed Timberlake, Law + ArtWorks, legal issues for artists, Mike Tadych, Pam Chestek, triangle artworks
(The original version of this article was posted by London attorney Elizabeth Emerson on the blog “Art and Artifice: a weblog dedicated to everything concerning art and the law”. Triangle ArtWorks appreciates Ms Emerson granting us permission to reprint it here.)
by Elizabeth Emerson
In the recent US case Crile v Commissioner, the IRS sought to show that the forty-year career of a well-known artist, some of whose works hang in the Metropolitan Museum of Art and the Guggenheim, was not a business, but merely a hobby.
The case turns on the following point. Relevant US law permits taxpayers to deduct the expenses of their trade or business from the taxable profits of that business. And, if the expenses are greater that the profits, then the taxpayer may generate a net loss. That loss may be of value to the taxpayer if she or he has other profits against which the loss can be set, thereby reducing the overall tax bill payable.
But if the taxpayer’s activities are not a business but a “hobby”, then the deduction position is different. The expenses of a hobby can be deducted against any profit it may make, but only to the extent of those profits. Where the expenses of a hobby are greater than its profits, the taxpayer is not entitled to generate a loss. This is intended to prevent a taxpayer from running a profit-making business and at the same time enjoying a loss-making hobby activity (such as horse breeding or drag racing) – and using the losses generated in their spare time to reduce their business tax bill to nil.
In the case of Crile the artist made a profit working as an art professor, but a loss working as an artist. When she sought to offset the two, the IRS argued that her losses as an artist were not allowable since her artistic production was a hobby. In determining whether an activity is a hobby or a business, the IRS will consider whether the activity is carried on with the objective of making a profit, or whether the real objective is the taxpayer’s own entertainment. In coming to a decision the IRS will apply the “hobby loss rules”. These are nine different factors to be considered, such as whether the taxpayer keeps accurate books and records of the activity, how much of the taxpayer’s time an activity is expended on the activity, to what extent the activity has elements of personal enjoyment or recreation and so on.
The outcome of the case, hailed as a “victory” for artists, was that the taxpayer’s long and distinguished career – on which she kept detailed records, used a bookkeeper and agent, and spent much of her working time, although she typically lost money – was indeed a business. The court acknowledged that given the unusual nature of the art world, an atypical profit structure – such as a string of losses over many years, or sudden success following a successful show or review – would not necessarily be taken as evidence of a hobby. Nor would a business “be turned into a hobby merely because the owner finds it pleasurable” which is a relief – it would certainly be harsh tax result if it was necessary to dislike your own business in order for your expenses to be deductible. “Suffering,” the court confirmed, “has never been made a pre-requisite to deductibility.”
It has been pointed out however that the deductions which the IRS sought to disallow in this case were suspiciously large, and in some instances were of a personal nature which should not in any event have been deductible. The taxpayer’s approach to deductions, the court noted, was that “most experiences an artist has may contribute to her art and that most people with whom an artist socialises may become customers or otherwise enhance her career” – on which basis she deducted a great many expenses which did not pertain directly to her career as an artist, such as cable television bills, taxis to the opera, and tips to doormen.
The IRS therefore made a twofold argument: firstly that the taxpayer’s activities were a hobby and as a second (and more reasonable) line of defence that, if the activities were a business, then the expenses in question were not all “ordinary and necessary” for that business and therefore not deductible. While the court’s decision as to the first argument will be a relief for US artists, the decision on the second may not be good news for this particular taxpayer.
Thanks to our Lawyer’s Task Force for spotting this article and obtaining authorization from Ms. Emerson for us to post it here. Triangle ArtWorks Lawyer’s Task Force is exploring ways to assist the Triangle’s creative community with legal issues and education. The Lawyer’s Task Force has already been instrumental in loading ArtWorks Resource Pages for Trademark/Copyright and Business. If you are a lawyer and are interested in getting involved, email us!
Do you have a business idea and don’t know where to start? Do you have a creative idea that you want to protect? Do you even know where to start to look into these issues?
Well, Triangle ArtWorks is here to help. A great team of law students from UNC Law School’s Pro Bono Program has scoured the internet for you and pulled together a list of the best resources and links they could find on the issues of business form and copyright. Although these resource pages are not a substitute for legal advice and CERTAINLY should not be used as such, they are a good place to start. We have done that first search for you, saving you the time of searching the internet and wasting time on irrelevant sites.
So far, we have loaded new sections of the Resource Directory on Copyright/Trademark and Starting a For-Profit Business. We will be adding resources on Contracts and other business forms after the first of the year.
If you want to help or have input for us on programs or needs, let us know!
Tags: business form, copyright, creative business, creative economy, economic impact of the arts, for profit arts businesses, legal issues for artists, trademark, triangle artworks
As those of you who live in Raleigh know, October 11 is Election Day. Last Thursday, I attended an event put on by Raleigh Downtown Marketing called “Three Candidates – One Stage” where Raleigh’s mayoral candidates answered questions from Facebook and Twitter. This event was covered by WRAL and there is a good overview, including interviews of the candidates on the issues of economic development and the bond issue by here.
In case you don’t know, the candidates are Nancy McFarlane (I), Billie Redmond (R), and Randall Williams(R). I have to say, after listening to all of them talk, my main thought was that they were ALL incredibly smart, capable people who were ALL very passionate about the City of Raleigh and its future. I think it is a credit to Raleigh that its citizens have such a great candidate field to choose from. If you want more specifics on their backgrounds, the N&O has done in-depth articles on each of them. (Williams, Redmond, McFarlane)
Candidates postion on the importance of the arts community?
At the Thursday night “twitter” candidate forum, I sought to determine how each candidate felt about public funding of the arts and, more broadly, the role of the arts and creative community in Raleigh’s future. I tweeted, I Facebooked, I tweeted again, but only Nancy McFarlane was specifically asked an arts related question.
Nancy McFarlane replied that Raleigh needs to support its arts community because of its role in creating a “sense of place” for the City. She said, “The best way to create jobs is to make this the best place to live in America”, and went on to talk about her love of the arts and her past work with arts groups. Looking forward, she mentioned other cities she has been visiting in her role on City Council, such as Phoenix and New Orleans, and how she learned new methods for supporting arts businesses, such as special zoning or financing, that Raleigh could look into for the future.
I should note here that, as an ex-member of the Raleigh Arts Commission, I got to know Nancy in her work as the Council liason, and she was the only liason during my 6 year term that showed up to all of the Comission meetings and was truly a partner in the work we did.
When neither Williams nor Redmond were given an arts-related question at the Forum, I contacted them directly through their campaign websites. Randall Williams got back to me quickly and personally, which in my book, is BIG. In response to my question about his position on public funding of the arts, and the relationship between the arts and Raleigh’s future, he responded:
“Anyone who has seen the statue of David in Florence should be for public and private support of the arts. I would be against $750,000 funding of public art in public safety center in this economy.
I have talked with Dr. Meymandi who is a good friend and sought out his thoughts on further private funding of art in public places (such as Dix property) and think that is something a Mayor should vigorously pursue”
I thank Dr. Williams for the quick response and great information.
I never heard back from Billie Redmond or her campaign. Take from that what you will.
Look at the candidates backgrounds and websites, consider their positions on the role of the arts in our greater community, and GET OUT THERE AND VOTE! If you need information about where or how to vote, click here.
And Orange County folks, watch here for information on your elections soon!
Part of ArtWork’s mission is to keep the arts and creative community informed on political and civic issues, so that they can be engaged in those issues. Obviously, voting for candidates that are aware of the importance of the arts to our community’s economic future and quality of life is a large part of that.
We look forward to the future of ArtWorks, where we can provide information about all races in the Region. But as a volunteer run organization at this point, we are covering the elections we had voluteers offer to cover…Raleigh and Durham. If you have information that you can share about any candidates in upcoming elections in the Triangle, feel free to share it below.
by Joan Blazich
It seems like a variation of this bill comes around every few years in Congress, yet it never makes it past the committee level. But it should, because it will have a massive impact on ALL artists. Why? Because, as of right now, there exists a disparate gap between how artists and collectors are treated when it comes to claiming IRS tax deductions for donating works of art. This definition of art includes literary, musical, artistic, and scholarly creations.
Under current laws, a collector who chooses to donate an artistic work to a nonprofit institution such as a school, museum, etc., may deduct the fair market value of that piece for tax purposes. So, if the going rate for the artists work is, say, $5000, that collector can deduct $5000. However, if an artist chooses to donate one of their works to a nonprofit entity, as the law stands now, they are only entitled to deduct the costs of creating that work.
So, a visual artist can deduct the costs of construction materials such as canvas, paint, clay, etc., but nothing more. For musical compositions, you could donate the cost of staff paper; for literary compositions, the cost of typing paper, etc… you get the general idea. Given the ever-increasing costs of artistic supplies, as well as the time and effort that goes into creating every artistic creation, it doesn’t make much sense for artists to not receive full deduction credits for their donations. After all, that creation has value, something which remains regardless of whether the item in question is sold or donated.
Thankfully, a bipartisan group of Representatives in the U.S. House is again working on a bill that would help correct this imbalance. Known as the Artist Deduction Bill, H.R. 1190, this legislation would end this disparity by granting artists the same deduction allowances as collectors. This would not only offer an immediate benefit to artists, but may also help to increase donations to nonprofit entities in the future.
This sounds like a great idea! How can I show my support?
The great people at American’s for the Arts have made it very easy to help support this legislation- all it takes are a few clicks of a mouse. Click here to petition your Representative online to support this bill. I just did it, and it literally took less than one minute to make my support of this bill known to my local Representative, David Price. Americans for the Arts provides a form letter. However, as always when sending such letters, if you have time, providing personal stories or examples of the impact of the issue on your life and work would make the letter more effective.
Taxes are never enjoyable for anyone, and we all want every deduction we can claim. This includes artists, whose creative endeavors make our communities a better, brighter, more intellectually-stimulating place. So why not give our artists the same tax deduction opportunity as collectors? Please take a few moments to contact your local Representative in support of H.R. 1190. It’s quick, it’s easy, and it will make a significant difference for all of our artists.
Joan Blazich, who is interning for Triangle ArtWorks this summer, is a second-year law student at the University of North Carolina School of Law. She also holds a Doctorate in Music and is an active performer in numerous local ensembles. She can be reached by email.
Do you have something to say to the Triangle arts and creative community? Be a writer or guest blogger for ArtWorks! Do you have news to share? Help us keep this community informed! Email
Tags: Americans for the Arts, art law, artists
Whether you’re a musician, filmmaker, painter, game developer, actor, or gallery owner, sooner or later you will be asked to sign a contract. If you are serious about your art (as art and as a business), you will need to take a serious approach to understanding, negotiating and performing the contracts that are presented to you. Here’s a list of 10 things you should consider when someone hands you a contract.
1. Establish expectations. A contract should establish the parties’ expectations for the relationship. This is just as important as the payment terms or your ability to get out of the contract. If you sign a contract that doesn’t reflect your expectations, the relationship is destined for failure. For example, if you’re negotiating a recording agreement, and you expect to keep all your publishing rights, but the record label expects to share in the publishing rights, you have a problem. If the parties’ expectations are not aligned, you may be better off finding another deal.
2. Keep it simple and clear. Deals in the entertainment industry can be very complex, as can the contracts for those deals. Sometimes the complexity is necessary, but not always. If possible, try to use contracts that say what you mean in a simple, concise and clear manner, but be sure not to oversimplify. If both parties understand what the contract means, you’ve hit the mark.
3. Everything is negotiable. Everything is negotiable—even terms that the other party tells you aren’t negotiable. You’re not likely to get everything you want, and if you push on things that are extremely important to the other party, you may lose the deal, but you will quickly learn where there’s flexibility. Part of the art of negotiating is identifying the things that are important to you and the other party, and finding a middle ground. If an important point becomes non-negotiable—a “deal killer”—then you may have to walk away from the deal.
4. Be willing to walk away. This is very important and, sometimes, it may be your only leverage in negotiating a contract. Leverage—the principle of using a small advantage or even merely a perceived advantage to gain a benefit—is critical in contract negotiations. Sometimes, especially as an artist, the only leverage you will have is the ability to walk away from a deal. If you indicate you’re willingness to walk away, the other party may be more willing to negotiate terms in your favor.
5. If you don’t understand something, ask. Contracts are legal documents often drafted by lawyers and usually include confusing language or concepts. So, don’t be afraid to ask a question if you don’t understand what something means (remember, there are no stupid questions). If you sign a contract, it’s binding whether you understand it or not. Understand what each provision means before you sign it.
6. Use a qualified lawyer if you can. While lawyers can be expensive, they can also save you money and aggravation in the long run (and the short run). A lawyer can help you understand the contract and negotiate terms in your favor. A qualified lawyer will know your industry and which terms should be negotiated. Avoid using a friend or relative who is a lawyer, but doesn’t specialize in your industry—you may end up paying for it down the road.
7. Put all deal terms in writing. It’s surprising how many times you may hear “just trust me” when you’re negotiating a contract. That’s a negotiating tactic—an appeal to your emotions—often used by people who don’t have a legitimate negotiating position. All your important deal points should be in the contract and not left to “trust.” These include: (a) the reason for entering the contract; (b) what you agree to do and what the other party agrees to do; (c) when these things are supposed to happen; (d) what the financial terms of the deal are (e.g., how and when you get paid); (e) how you get out of the deal if something goes wrong; and (f) how long the deal lasts.
8. Don’t make assumptions. Don’t assume anything when drafting or negotiating a contract. Spell out all the key assumptions in the contract. For example, if you’re negotiating an agreement with a personal manager named John who works in a company with several personal managers, don’t assume that John will actually do your work. If it’s important to you that John actually does your work, make that clear in the contract.
9. Pay attention to “boilerplate.” Boilerplate refers to the standardized, formal language in a contract that is often located at the end of the contract. Boilerplate provisions affect your legal rights and are binding when you sign the contract even if you don’t read them. Be sure you read and understand these provisions, and negotiate them if you don’t like what they say. Examples of boilerplate provisions are: (a) requiring the loser in a lawsuit to pay the other party’s legal fees; (b) requiring a lawsuit to occur in a selected state (which may be far from where you are); (c) prohibiting transfer or assignment of the agreement; (d) specifying which state’s law controls the interpretation of the agreement; and (e) requiring arbitration.
10. Understand your business. Translating your business deal into a contract requires a good knowledge of the customs and nuances of your business. If you don’t already have an intimate knowledge of how your business works and how deals are structured, talk to others who have done similar deals. If you don’t know what’s customary in your industry, you may not end up with the best contract.
Every wondered what it takes to protect your trademark? Starting a business and want to know how to pick a good trademark? ArtWorks has just added an excellent resource tool to its Legal section under Artist Resources: “An Essential Guide to Trademark Protection“.
Eric Stevens, a lawyer in Poyner Spruill’s Entertainment Law Section wrote the book. As he says,
In my practice, I have found that people make some common mistakes when they are adopting trademarks that lead to serious problems that could have been prevented if they knew some basic facts about trademark law. For instance, if you adopt a trademark that “merely describes” the product or service being offered under that mark, you do not have immediate trademark protection available. On the other hand, if you adopt a trademark that is “suggestive,” meaning that the mark suggests, but does not directly describe, some aspect or quality of your product or service, then immediate protection is available (so long as someone else has not already adopted the mark). This book is a simple primer intended to give people and businesses the tools to avoid those simple mistakes and thereby avoid unnecessary headaches.
Eric and his partner, Jim O’Brien who is also a member of Poyner Spruill’s Entertainment Law Section, are members of ArtWorks Law Committee. Thanks to Eric and Poyner Spruill for letting us make this book easily available to our community.
ArtWorks Law committee is working to collect and create more legal resources to load on the site. What legals areas should we be sure to cover?
BethTags: art law, trademark law