Touring the US? Damn Those Taxes…

Now that international touring is coming back in force, I thought it would be a timely moment to give a USA touring withholding tax 101.

Firstly, Australian artists touring the USA may be subject to both Federal and state taxes.

When it comes to federal withholding tax, promoters will generally be required to withhold 30% tax from any performance fees.

As an Australian business you generally have one of two options:

1. cop the 30% tax and then file a USA tax return at the end of the calendar year to try to recover any tax refunds.
2. engage a US accountant to prepare a Central Withholding Agreement which varies the tax down based on the budgeted US profit and loss for the tour and year… For a good chunk of our client this regularly brings down the tax to $0 when they are spending more on US touring then they are earning.

As of the last few years the US government has brought in a new tax free threshold for foreign businesses, so if performance fees are below (insert figure) it may actually be a third option to avoid the federal withholding.

Further to the above there’s also a maze of rules around contractors, getting social security or ITIN numbers, state taxes and payroll issues for contractors.

If you need any help to stay compliant with the IRS (USA tax office) please chat to one of our Business Management team on info@thegildgroup.com

Gild has a great team of USA accountants and withholding tax agents that we work with to help you navigate through these requirements.