By Robyn Guilliams Dear Law and Disorder, I have been in artist management for a long time, thought I had seen it all, but something just came up for one of my artists that has me completely stumped.\u00a0 My client was sent a 1099 for a hotel stay that the presenter provided for an engagement.\u00a0\u00a0 Most presenters that I work with pay for the hotels, but never once has the value of that hotel been included on the 1099 that the artist was sent.\u00a0 This particular place is a big resort, they too are the presenter.\u00a0 They often trade rooms for fees (it’s a very exclusive resort!), or they give small fees plus the accommodations (which includes meals), usually for two nights as a perk to the artist. It gets tricky for the artist, because they don’t pay for the hotel, so they have no expense to write off for that income. So that may mean they end up paying tax on that amount, thereby losing money doing this performance.\u00a0 That’s where this goes wrong for the artist, in my opinion.\u00a0 Artists obviously do this gig because of the resort.\u00a0 But, this has left a bad taste.\u00a0 What’s up with issuing the 1099?\u00a0 They say it is an IRS law that says hotel costs are income for the artist.\u00a0 By the way, they don’t tell you this up front…Searching for the Truth Dear Searching for the Truth: The answer to your question depends on the specific facts of the situation.\u00a0 (A lawyer\u2019s favorite answer to every question is \u2013 \u201cIt depends\u201d!) Generally, if a presenter provides accommodations to an artist as part of the artist\u2019s compensation, the value of the accommodations is NOT considered taxable income to the artist, if the accommodations are reasonable and necessary.\u00a0 For instance, if an artist is travelling from California to New York to play one show, the presenter providing the artist with two nights of hotel accommodations is reasonable and necessary.\u00a0 The value of the hotel accommodations in this instance would not be considered taxable income to the artist, and need not be included on the 1099. On the other hand, if a pianist travels away from home to play a concert and the presenter provides hotel and airfare for the pianist, her husband, her sister, her sister\u2019s next-door neighbor, and the next-door neighbor\u2019s pet monkey, this is not reasonable and necessary.\u00a0 The value of the airfares and accommodations for everyone except the pianist would be considered taxable income and SHOULD be reported to the artist on a 1099. Unfortunately for your artist, there are a few comments in your letter that indicate that the accommodations at the resort exceeded the \u201creasonable and necessary\u201d standard. \u00a0You state that the artists at this resort often accept accommodations in lieu of fees, or accept smaller fees plus accommodations.\u00a0 Why would an artist accept no fee, or a substantially smaller fee, if the artist wasn\u2019t receiving something of value (in addition to the hotel room) in return?\u00a0 Plus, you mention that artists \u201cdo this gig because of the resort\u201d\u2026 and the presenter provides \u201ctwo nights as a perk to the artist\u201d.\u00a0 Again, the artist is receiving something of value besides the usual hotel accommodations.\u00a0 If an artist is receiving a significant personal benefit from the accommodations besides a place to lay his head after the show (such as the opportunity to enjoy resort amenities or an extra night of accommodations), then the value of the accommodations constitutes taxable income and must be reported. You say that it\u2019s tricky for the artist, because he has no expense to write off his income.\u00a0 But wouldn\u2019t this be the case if he was receiving his usual fee plus a regular, non-resort, hotel room?\u00a0 I\u2019d suggest that in the future, unless your artist understands the taxable \u201cvalue\u201d of receiving resort accommodations, including the included room service and use of the infinity pool, have him stay at the Motel 6 down the street. _________________________________________________________________ For additional information and resources on this and other legal and business issues for the performing arts, visit ggartslaw.com To ask your own question, write to lawanddisorder@musicalamerica.org. All questions on any topic related to legal and business issues will be welcome.\u00a0However, please post only general questions or hypotheticals. GG Arts Law reserves the right to alter, edit or, amend questions to focus on specific issues or to avoid names, circumstances, or any information that could be used to identify or embarrass a specific individual or organization. All questions will be posted anonymously. __________________________________________________________________ THE OFFICIAL DISCLAIMER: THIS IS NOT LEGAL ADVICE! The purpose of this blog is to provide general advice and guidance, not legal advice. Please consult with an attorney familiar with your specific circumstances, facts, challenges, medications, psychiatric disorders, past-lives, karmic debt, and anything else that may impact your situation before drawing any conclusions, deciding upon a course of action, sending a nasty email, filing a lawsuit, or doing anything rash!<\/p>\n