[e-drive]EQUIFLASH [TAX STATUS OF PERFORMERS IN QUESTION]

[Darlene Bullard]

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NATIONAL - TAX STATUS OF PERFORMERS IN QUESTION 
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Almost simultaneous decisions announced last week by the Tax Court of
Canada and the Canada Revenue Agency have dealt a blow to the
long-standing presumption of artist's independent contractor status,
Canadian Actors' Equity Association announced today.  In direct
opposition to the industry standards and existing business practices a
ruling of the tax court and separate CRA assessments have given cause
for concern in the performing arts among artists and producers alike.

In separately released decisions, the Tax Court of Canada has held that
three dancers at Royal Winnipeg Ballet are employees for tax purposes,
and are not carrying on business for themselves.  Further east in
Thunder Bay, Ontario the CRA has ruled that actors, designers and other
independent artists are employees of Magnus Theatre.  The Magnus
decision was triggered by an Employment Insurance application by a film
technician who also works in theatre as an actor but who was only
claiming for his film technician work. As a result of the investigation
by the CRA, 30 artists who worked at the theatre have been reassessed.
Ironically, the same actor was found not to be an employee by a
different CRA office for a contract the actor had with the
internationally known Stratford Festival theatre.

CAEA Executive Director Susan Wallace stated: "These rulings have
implications on all Canadian performing artists who struggle every day
to make a living through their craft. The economic well-being of our
members is of concern to us and this is something that we will monitor
very closely."  As employees, legitimate business expenses the artist
incurs like agent fees, travel to out-of-town auditions and physical
fitness costs will no longer be tax deductible.

CAEA is appealing the Thunder Bay determination on behalf of all of its
affected members and is considering a further appeal of the Royal
Winnipeg Ballet case.  For the time being the status quo remains in
effect for other performers not affected by the rulings.

If you have any questions about your status please contact your tax
professional or the Association. 

This notice if for information only and as more details becomes
available, and the appeals process continues, we will keep our members
posted through this system or through our web site: www.caea.com.

Canadian Actors' Equity Association 
44 Victoria Street, 12th Floor 
Toronto, ON M5C 3C4 
Tel: 416-867-9165 
Fax: 416-867-9246 
e-mail: communications at caea.com