[Dixielandjazz] Re: CD Festival Sales Charges

[Robert S. Ringwald]

Steve,

In California, the BoE (Board of Equalization) collects sales tax.  They are 
god.  You do not mess with them.  They can walk into a business, stand by 
the cash register, take all the money collected that day for back taxes, & 
then padlock the door and you are out of business.

As I understand, they have ruled that the Sacramento Jazz Jubilee is 
responsible for any sales tax owed from CD sales at the Jubilee.  This is 
even though the bands are independent contractors.

The Sacramento Jazz Jubilee has a budget of a million 5 or so.  Thus, we are 
not just some little Jazz festival held in a hotel over a weekend where CDs 
are sold & the BoE is not aware.  They are very aware of us.  In fact, we 
have recently gone through a BoE audit.   .

Because we are responsible for the sales tax, we have to collect sales tax 
from the bands for all CDs that are soled by them at the festival.  In 
Sacramento, the sales tax rate is 7.75%.  The typical CD price is $15. 
Thus, 7.75% of $15 is $1.16.

 Again, because the Festival is so big, with over 100 bands, it is quite a 
job to collect all of the information, total it, and fill out the forms. 
Along with that, we have to bill the bands & keep track of who has paid & 
who hasn't.  As any business man can tell you, trying to collect money owed 
after the fact, can be very time consuming.  All of this takes a lot of paid 
staff time.

 We have been told that, in order to do this job, we need to charge the 
bands $4 per each CD sold.  This means that $2.84 of each $4 collected is 
used to pay the staff's wages for doing this job.

Up until last year, the charge to each band was $3 per CD sold.  This meant 
that $1.84 per CD went for staff time expenses.

In 2004, the price charged to bands was raised by one dollar to $4.00  This 
was after we went through the BoE audit.  I suspect that the audit had 
something to do with the price increase.

My first instinct is to say that the bands are being over charged.  However, 
without knowing exactly how much time it actually takes to complete all of 
the paperwork, I cannot make an informed judgment.

It does seem to me that with using a computer, it should be fairly easy to 
do the bookkeeping.  Much faster than doing it by hand.  Listmates Bob 
Williams and Paul Edgerton, our STJS web masters, should be able to come up 
with a program to do this.

I do believe that it is time for us to get an explanation from the Jubilee.

  If and when we do, I will keep you informed.

--Bob Ringwald
Placerville, CA USA