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Saturday, August 21, 2004

Sheryl Crow's Tax Problems

Saturday, August 21, 2004

Photo of Sheryl CrowWe previously have blogged the issue of the administrative problems in subjecting athletes and entertainers to multiple state and local income taxes in the locations in which they perform (see here). In this month's "Shop Talk" column in the Journal of Taxation, Sheldon Banoff takes the issue to a new level in discussing the potential tax plight of singer Sheryl Crow. According to press reports, Crow performed a 40-minute concert on a United Airlines flight from Chicago to L.A. to publicize Sony's new on-line music service. Banoff notes Crow's joking reference that she hoped she did not have to pay taxes in any of the states she flew over and asks, why not:

Assuming [states she flew over] would have taxed Ms. Crow had she been performing on a moving train, would they similarly have spatial jurisdiction? Or would Ms. Crow's performance be exempted from state taxation because she is not performing in the state, but rather above the state (i.e., "out of state")? Presumably the rest of the paid crew . . . faces similar tax questions. Is there a multi-state compact that exempts pilots and flight attendants from multiple taxation?

http://taxprof.typepad.com/taxprof_blog/2004/08/sheryl_crows_ta.html

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Comments

Technically, a person is "in" a state if the person is on state land, above state land, or below state land. Otherwise, one could avoid criminal prosecution by jumping into the air while doing the crime (Ok, only works for SOME crimes).

The question, though, isn't whether the person is "in" the state but whether there is sufficient nexus. Are there "contacts" at 30,000 feet?

Posted by: Jim Maule | Aug 23, 2004 6:36:35 AM

The (general) rule is that you are exempt from paying taxes to that state if you spend less than 60 days in it--30 in some cases, I believe. (You are not, of course, exempt from paying taxes on that income in your home state.)

So even cross-continental flight attendants likely would be exempt from paying in any given state.

One might be able to make a theoretical case for Amtrak conductors on the Bos-Was corridor, but the cost of enforcement would make Gary Berger plotz.

Posted by: Ken Houghton | Dec 31, 2004 7:52:48 AM