The term non-resident entertainers' tax refers to a state-level tax paid by individuals and corporations that received compensation for performing before a live audience outside of their state of residence. The exact withholding rules for each state with such a provision may be different.
A non-resident entertainers' tax falls into the category of an ad valorem tax, which means the amount of tax collected is based on the value of compensation received for the performance. Typically, these taxes apply to individuals, partnerships as well as corporations receiving compensation for live performances delivered to an audience. Since the entertainers would normally pay income taxes to their legal state of residence, these taxes only apply to non-residents.
States that collect a non-resident entertainers' tax will oftentimes have different rules. For example, Missouri collects this tax from anyone receiving compensation for performing a vocal, instrumental, musical, comedy, dramatic, dance or other performance before a live audience. The withholding amount is 2% of the contract's value and does not allow for deductions.
The state of Wisconsin also imposes this tax. A non-resident entertainer is defined as anyone receiving compensation for furnishing amusement, entertainment, public speaking services or performs in sporting events. Subject to compensation thresholds, the tax is 6% of the total contract price, allowing deductions for travel-related expenses such as transportation, lodging and meals.
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