Tax Law Threatening Oregon Music Groups

Confusion surrounding unemployment tax law in Oregon has forced the cancellation of at least one summer music festival, and is putting many other nonprofit music organizations at risk. “The issue revolves around whether musicians hired for concerts are independent contractors, responsible for paying their own unemployment taxes, or regular salaried employees, with their employers responsible for such taxes.” The nonprofits have always paid their musicians as independent contractors hired for a limited period of time, and relied on them to cover their own tax burden, but the state is now claiming that the musicians are salaried. For many groups, there simply isn’t any extra money in the budget for unemployment tax, making the dispute a potential life-and-death matter for a few organizations.