Texas Passes Tax Rebate for Local Music Venues

Texas Governor Greg Abbott signed into law a bill to help music venues in the state by providing partial tax rebates from the tax collected from alcohol sales. SB 609 created the “Texas music incubator rebate program” to help music venues and music festival promoters that bring live music to local communities. The Music, Film, Television, and Multimedia Office within the office of the governor will establish and administer the program.

Texas Music Incubator Rebate Program

The Texas music incubator rebate program provides eligible music venues and eligible music festival promoters a rebate of the mixed beverage gross receipts tax under Subchapter B of Chapter 183 of the Texas Tax Code and sales taxes from the sale of beer and wine. Venues can claim a rebate for the amount remitted to the comptroller in the preceding fiscal year up to $100,000.

Eligible Venues

To be eligible for a rebate, a music venue or music festival promoter must have been a permittee subject to the mixed beverage gross receipts tax or a permit holder subject to the sales tax on the sale of beer or wine for at least two years preceding the date on which they submit an application. Eligible music venues must have been a retail establishment with a dedicated audience capacity of not more than 3,000 persons, and eligible festival promoters must have held a music festival in a county with a population of less than 100,000.

Applicants must have also entered into a written contract with a musical performance artist to conduct a live performance at the venue or festival under which the performer was compensated either through a specified percentage of ticket sales or other sales during the performance, or a guaranteed amount in advance of the performance.

Additionally, applicants must have met at least five of the following criteria, one of which must be that the applicant (1) marketed live music performances through listings in printed or electronic publications; or (2) provided live music performances five or more nights per week.

The applicant must also have:

• Employed or contracted the services of one or more people tasked with two or more of the following positions or services: (i) sound engineer, (ii) booker, (iii) promoter, (iv) stage manager, or (v) security personnel;
• Had live performance and audience space;
• Provided technical sound and lighting support, either in-house or through a contract with a vendor;
• Had a space for the storage of audio equipment or musical  instruments;
• Applied cover charges to one or more live music performances through ticketing or a front door entrance fee; or
• Maintained hours of operation that coincide with live music performance show times.

Disaster Area Exception

The Music, Film, Television, and Multimedia Office may use its discretion to provide exceptions for music venues or a music festival promoters located, or usually held, in a county located wholly or partly in a federal or state declared disaster area at any time during the preceding two-year period. Under these exceptions, the office may provide a rebate to a music venue or a music festival promoter that does not meet the eligibility requirements solely due to its location in a disaster area, and the office may expedite the review of an application submitted by a music venue or music festival promoter located in a disaster area.

Application Process

The Music, Film, Television, and Multimedia Office will develop the application form and an online portal for submitting the application. A rebate application must state the amount of mixed beverage gross receipts tax and sales tax receipts that are attributable to the sale of beer and wine and remitted to the comptroller by the music venue or music festival promoter in the preceding fiscal year. It must also include any other evidence required for the office to determine that the music venue or promoter qualifies for a rebate and any other information the office determines necessary to administer the program.

Effective Date

The Music, Film, Television, and Multimedia Office is required to establish the Texas music incubator rebate program no later than September 1, 2022. The office will accept rebate applications beginning on September 1 of each year and may provide rebates until the fund is exhausted.

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