Frequently Asked Questi<strong>on</strong>s Who is a performer, <strong>and</strong> what is a performing entity? A performer may be an athlete, a paid entertainer, or a speaker. An athlete is any sports figure who is paid for competing, dem<strong>on</strong>strating, making a public appearance, or endorsing merch<strong>and</strong>ise. An entertainer or speaker may be an ac<str<strong>on</strong>g>to</str<strong>on</strong>g>r, singer, musician, dancer, circus performer, comedian, celebrity, or a public speaker or lecturer. Included as performers are individuals paid <str<strong>on</strong>g>to</str<strong>on</strong>g> further an athlete, entertainer, or speaker’s performance, such as a coach, trainer, or crew member. A performing entity is any entity that employs, engages, or comprises <strong>on</strong>e or more performers. The performing entity’s legal classificati<strong>on</strong> does not affect the withholding requirement. The performing entity may be a corporati<strong>on</strong>, partnership, limited partnership, or any other legal entity. Who should withhold tax <strong>on</strong> performers <strong>and</strong> performing entities as a performer withholding agent? If the <strong>Mass</strong>achusetts venue or the lessee of the venue where the performance takes place has a c<strong>on</strong>tract <str<strong>on</strong>g>to</str<strong>on</strong>g> pay the performer or the performing entity, the venue or the lessee of the venue should withhold. If, however, the venue or its lessee is not a party <str<strong>on</strong>g>to</str<strong>on</strong>g> the c<strong>on</strong>tract with the performer or the performing entity, the resp<strong>on</strong>sibility <str<strong>on</strong>g>to</str<strong>on</strong>g> withhold falls <str<strong>on</strong>g>to</str<strong>on</strong>g> the promoter. If there is no promoter, or if the promoter is not a party <str<strong>on</strong>g>to</str<strong>on</strong>g> the c<strong>on</strong>tract, the withholder may be a vendor or a payroll service provider or any other entity paying compensati<strong>on</strong> for a performance. The Department of Revenue (DOR) will advise who the performer withholding agent should be if those who are in a positi<strong>on</strong> <str<strong>on</strong>g>to</str<strong>on</strong>g> withhold need clarificati<strong>on</strong> as <str<strong>on</strong>g>to</str<strong>on</strong>g> their withholding resp<strong>on</strong>sibility (call DOR at 617-887-MDOR or e-mail your questi<strong>on</strong>s <str<strong>on</strong>g>to</str<strong>on</strong>g> the performer withholding unit at entertainers@dor.state.ma.us). No payment that is over the withholding threshold can be made <str<strong>on</strong>g>to</str<strong>on</strong>g> a performer or performing entity unless the tax has been withheld or waived by DOR; any<strong>on</strong>e who transfers funds ultimately payable <str<strong>on</strong>g>to</str<strong>on</strong>g> a performer or performing entity is resp<strong>on</strong>sible for ensuring that the proper withholding has occurred. Example: A circus comes <str<strong>on</strong>g>to</str<strong>on</strong>g> <str<strong>on</strong>g>to</str<strong>on</strong>g>wn every year for five performances. City Arena leases performance space <str<strong>on</strong>g>to</str<strong>on</strong>g> Trapeze Promoti<strong>on</strong>s, the promoter that arranges <str<strong>on</strong>g>to</str<strong>on</strong>g> bring the circus <str<strong>on</strong>g>to</str<strong>on</strong>g> <str<strong>on</strong>g>to</str<strong>on</strong>g>wn. Trapeze Promoti<strong>on</strong>s pays City Arena an amount based <strong>on</strong> a percentage of ticket sales. Trapeze Promoti<strong>on</strong>s pays 4 A <str<strong>on</strong>g>Guide</str<strong>on</strong>g> <str<strong>on</strong>g>to</str<strong>on</strong>g> <str<strong>on</strong>g>Withholding</str<strong>on</strong>g> <str<strong>on</strong>g>Taxes</str<strong>on</strong>g> <strong>on</strong> <strong>Performers</strong> <strong>and</strong> Performing Entities Frequently Asked Questi<strong>on</strong>s the circus for the performances. Trapeze Promoti<strong>on</strong>s, the lessee of the venue, is the performer withholding agent because it has a c<strong>on</strong>tract with the circus, which is the performing entity. City Arena does not have a c<strong>on</strong>tract with the performers or a performing entity <strong>and</strong> does not withhold. Example: Sports Associati<strong>on</strong> rents the Richm<strong>on</strong>d Country Club <strong>and</strong> sp<strong>on</strong>sors a golf <str<strong>on</strong>g>to</str<strong>on</strong>g>urnament there. Twenty professi<strong>on</strong>al golfers come <str<strong>on</strong>g>to</str<strong>on</strong>g> <strong>Mass</strong>achusetts <str<strong>on</strong>g>to</str<strong>on</strong>g> participate in the <str<strong>on</strong>g>to</str<strong>on</strong>g>urnament. Sports Associati<strong>on</strong> pays each golfer <str<strong>on</strong>g>to</str<strong>on</strong>g> participate. Sports Associati<strong>on</strong> must register as a performer withholding agent <strong>and</strong> withhold from each golfer. Example: Troupe Inc., a theater company, brings a play <str<strong>on</strong>g>to</str<strong>on</strong>g> <str<strong>on</strong>g>to</str<strong>on</strong>g>wn. Performances are held at the City Theater, which has rented performance space <str<strong>on</strong>g>to</str<strong>on</strong>g> Troupe Inc. for a flat rental fee. Thirty professi<strong>on</strong>al ac<str<strong>on</strong>g>to</str<strong>on</strong>g>rs perform in the play; each ac<str<strong>on</strong>g>to</str<strong>on</strong>g>r is paid as an independent c<strong>on</strong>trac<str<strong>on</strong>g>to</str<strong>on</strong>g>r. Troupe must register as a performer withholding agent <strong>and</strong> withhold from each ac<str<strong>on</strong>g>to</str<strong>on</strong>g>r. Example: A <strong>Mass</strong>achusetts radio stati<strong>on</strong>, WPER, promotes a semi-annual music <strong>and</strong> entertainment event. It hosts the event at City Arena, which it has rented for the occasi<strong>on</strong>. WPER c<strong>on</strong>tracts with four entertainers <str<strong>on</strong>g>to</str<strong>on</strong>g> perform at the four-hour event. WPER must register as a performer withholding agent <strong>and</strong> withhold from each of the entertainers. Example: The Extreme Au<str<strong>on</strong>g>to</str<strong>on</strong>g>mobile Associati<strong>on</strong> rents Valley Exhibiti<strong>on</strong> Center for its au<str<strong>on</strong>g>to</str<strong>on</strong>g>mobile show. As part of the show, the associati<strong>on</strong> c<strong>on</strong>tracts with an ac<str<strong>on</strong>g>to</str<strong>on</strong>g>r from a weekly network televisi<strong>on</strong> show <str<strong>on</strong>g>to</str<strong>on</strong>g> appear at the event. The ac<str<strong>on</strong>g>to</str<strong>on</strong>g>r is paid $15,000 for appearing. The Extreme Au<str<strong>on</strong>g>to</str<strong>on</strong>g>mobile Associati<strong>on</strong> must register as a performer withholding agent <strong>and</strong> withhold from the ac<str<strong>on</strong>g>to</str<strong>on</strong>g>r. Example: Cranium Computer Company holds its annual employee gathering at Banquet Hall, a local c<strong>on</strong>venti<strong>on</strong> center. Cranium Computer hires a magician <str<strong>on</strong>g>to</str<strong>on</strong>g> provide entertainment for its employees after dinner. Cranium Computer Company must register as a performer withholding agent <strong>and</strong> withhold from the magician. Example: Prize Fight Events, a boxing promoter, rents an audi<str<strong>on</strong>g>to</str<strong>on</strong>g>rium in Mill<str<strong>on</strong>g>to</str<strong>on</strong>g>wn, <strong>Mass</strong>achusetts, <str<strong>on</strong>g>to</str<strong>on</strong>g> hold an event called Thursday Night Fights. Prize Fight Events c<strong>on</strong>tracts separately with each of eight boxers <str<strong>on</strong>g>to</str<strong>on</strong>g> pay purses ranging from $10,000 <str<strong>on</strong>g>to</str<strong>on</strong>g> $25,000 <str<strong>on</strong>g>to</str<strong>on</strong>g> participate in the event. Prize Fight 5 A <str<strong>on</strong>g>Guide</str<strong>on</strong>g> <str<strong>on</strong>g>to</str<strong>on</strong>g> <str<strong>on</strong>g>Withholding</str<strong>on</strong>g> <str<strong>on</strong>g>Taxes</str<strong>on</strong>g> <strong>on</strong> <strong>Performers</strong> <strong>and</strong> Performing Entities