Saturday, August 21, 2004

We previously have blogged the issue of the administrative problems in subjecting athletes and entertainers to multiple state and local income taxes in the locations in which they perform (see here). In this month’s “Shop Talk” column in the Journal of Taxation, Sheldon Banoff takes the issue to a new level in discussing the potential tax plight of singer Sheryl Crow. According to press reports, Crow performed a 40-minute concert on a United Airlines flight from Chicago to L.A. to publicize Sony’s new on-line music service. Banoff notes Crow’s joking reference that she hoped she did not have to pay taxes in any of the states she flew over and asks, why not:

Assuming [states she flew over] would have taxed Ms. Crow had she been performing on a moving train, would they similarly have spatial jurisdiction? Or would Ms. Crow’s performance be exempted from state taxation because she is not performing in the state, but rather above the state (i.e., “out of state”)? Presumably the rest of the paid crew . . . faces similar tax questions. Is there a multi-state compact that exempts pilots and flight attendants from multiple taxation?