Tax category for music CD

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Anon Inn's picture
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09/26/2011

Don’t laugh 

I play CDs for music during meals.  I’ve always used my own CDs for this until purchasing a CD last year to play exclusively for music during during meals.  I don’t play this or use the player at all for that matter except during guest meals.  All other CDs are my own or gifts from guests.

What deduction category would you place this in?

I put it in “supplies” because I couldn’t determine a better place.  It’s all of $10, but a deduction is a deduction

Smiling

TheBeachHouse's picture
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I honestly never thought about it.   On the list of important rules I need to comply with, this  one is low on my radar.

We play background music during breakfast from a CD.   It's generic, classical, quiet, instrumental.   Probably the same CD every day except during the Christmas season.  And we put on The Messiah for Easter morning.  

We also lend out our DVD's on rainy days and share a library of books.  

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PhineasSwann's picture
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In researching the artist question I came across this at the ASCAP site, which indicates if you play music from a commercial radio station (or satellite radio, apparently), there is a limited exemption:

Section 110(5)(B) provides a limited exemption for certain performances of music in food service, drinking and retail establishments by means of radio and television transmissions.

The exemption applies only to performances of music originated by a broadcast radio or television station or a cable system or satellite carrier, only if no direct charge is made to see or hear the performances, only if the performances are not further transmitted beyond the establishment where they are received, and only if the original transmission is licensed by the copyright owners -- that is, the radio or television station, cable system or satellite carrier is licensed by the copyright owners or their performing rights organizations.

The exemption contains objective standards which will enable both music users and copyright owners to determine whether particular radio and television performances are exempt from copyright liability. Two types of music users are exempt, under different standards: a food service or drinking establishment (defined as "a restaurant, inn, bar, tavern, or any other similar place of business in which the public or patrons assemble for the primary purpose of being served food or drink, in which the majority of the gross square feet of space that is nonresidential is used for that purpose, and in which nondramatic musical works are performed publicly") and an other establishment (defined as "a store, shop, or any similar place of business open to the general public for the primary purpose of selling goods or services in which the majority of the gross square feet of space that is nonresidential is used for that purpose, and in which nondramatic musical works are performed publicly").

A food service or drinking establishment is eligible for the exemption if it (1) has less than 3750 gross square feet of space (in measuring the space, the amount of space used for customer parking only is always excludable); or (2) has 3750 gross square feet of space or more and (a) uses no more than 6 loudspeakers of which not more than 4 loudspeakers are located in any 1 room or adjoining outdoor space; and (b) if television sets are used, there are no more than 4 televisions, of which not more than 1 is located in any 1 room and none has a diagonal screen size greater than 55 inches.

An other establishment (e.g., a retail store) is eligible for the exemption if it (1) has less than 2000 gross square feet of space; or (2) has 2000 or more gross square feet of space and satisfies the same loudspeaker and television set requirements as for food service or drinking establishments.

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Anon Inn's picture
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PhineasSwann wrote:

"A food service or drinking establishment is eligible for the exemption if it (1) has less than 3750 gross square feet of space..." 

Thanks for this.  

Morticia's picture
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When we first got here the previous owners had signed up for cable TV as a business. So we were covered for tv in the common room and playing music thru the cable.

Now we have satellite and we asked about business vs residential. They told us under 20 rooms they considered it residential.

I take that to mean we could play the music channels if we wanted. But, I don't particularly like background noise all the time.

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Generic's picture
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The music channels are licenced... so you are covered.

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Generic's picture
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So basically, turn on a radio station, or TV station that has the music and you don't have to pay. Don't play a CD.

We actually got contacted for the licence fee once. (Different country, of course) and we simply pointed out that by the legal definitions, we were exempt and so was every single B&B by our legal definition.... and if they continued to try to collect, I would have to discuss this with the government. Calls stopped. Thankfully, I'm fully exempt. But I know that it's an issue and businesses here get an invoice for playing music. But it's centralized and not by company. Heck, we even pay a fee on devices to cover the licence.

PhineasSwann's picture
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The legal principle is that you're playing music in your place of business (store, restaurant, inn, etc.) and that music is contributing to your financial success by creating a certain atmosphere. Thus the artist who created that music is entitled to some modest compensation. 

It's the same principle that prevents you from taking a photographer's pictures of your inn (or anything else) and using them on your website without first paying or getting permission. 

There are two licensing agencies - ASCAP and BMI - who regularly send investigators into stores and businesses. If you're playing their music without a license from them, they'll send you a semi-nasty letter and a bill. 

As I said, the copyright on classical music (except modern pieces like Aaron Copeland, etc) have all passed, so you're safe playing those pieces.

Morticia's picture
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Classical music - it's not being played by the original author, yes. Don't the rights apply to the orchestra's rendition?

Example - the happy birthday song is back in the public domain. But you can't play it for your guests with Beyonce singing it without her getting a cut, right?

I don't know the answer, just wondering aloud.

Breakfast Diva's picture
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You're right Mort.

BTW, thank you to all of the public for the royalty payments I've received over the years. I know it's a difficult situation for a b&b, but royalty payments are very important to the artist's involved. It's not just the megastars that get the benefits but we lowly musicians who performed on the recordings. 

Arks's picture
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Morticia wrote:

Classical music - it's not being played by the original author, yes. Don't the rights apply to the orchestra's rendition?

Example - the happy birthday song is back in the public domain. But you can't play it for your guests with Beyonce singing it without her getting a cut, right?

I don't know the answer, just wondering aloud.

Exactly what I was thinking. You don't owe Beethoven, of course, but you would sure owe whomever performed the music, plus the studio that produced the recording.

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OnTheShore's picture
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I think you are right, Morticia. If Phineas is playing a recording of the New York Symphony Orchestra's rendition of a Beethoven symphony, I believe the NYSO has a royalty claim even if Beethoven himself does not -- assuming they have not released their recording to the public domain or given it a free license (creative commons or some such).

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notAgrandma's picture
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I'm a bit lost when it comes to copyright infringement, but I thought that unless you're making money selling an artist's music, there's no need to worry about licensing fees.

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JimBoone's picture
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I think if we have friends at the house it is personal, if the same is played in a business it is considered that they were paying to hear the music since they were a paying guest.

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Generic's picture
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Nope, it's playing it for the public to enjoy.

PhineasSwann's picture
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I've lived in fear of having someone show up and tell me I need to pay ASCAP or BMI fees. 

So I play only classical music. Beethoven has long since lost his copyright rights. 

Anon Inn's picture
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I have a sudden new appreciation for my old Deutsche Grammophon recordings!

Generic's picture
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Are you paying the licence fee for playing music in a public venue? Yes, there really is a licence fee. Which is why many places put on radio, since they pay the fee.... and it's like $350+ just for playing a CD.

Anon Inn's picture
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Good point

gillumhouse's picture
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Supplies seems a perfect place.

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