1. What is an Arts and Entertainment District?
Americans for the Arts describes an A&E District as a “well-recognized, labeled, mixed-use area of the city in which a high concentration of arts and cultural facilities serve as the anchor attraction.”

2. What are the benefits of an Arts and Entertainment District?
As listed in the Arts and Entertainment Application, “The benefits offered to selected districts include property tax credits for renovation of certain buildings that create live-work space for artists and/or space for arts and entertainment enterprises, an income tax subtraction modification for income derived from artistic work sold by “qualifying residing artists”, an exemption from the Admissions and Amusement tax levied by an “arts and entertainment enterprise” or “qualifying residing artists” in a district, and access to financial assistance from the Maryland Economic Development Assistance Fund.

3. What is a “qualifying residing artist”?
An individual who “owns or rents residential real property in an arts and entertainment district; and derives income from the sale or performance within the arts and entertainment district of an artistic work, excluding adult entertainment, that the individual wrote, composed, or executed wholly or primarily within the district, either solely or with one or more individuals.”

4. What is an “arts and entertainment enterprise”?
An A&E Enterprise is a “for-profit or nonprofit entity dedicated to visual or performing arts, excluding adult entertainment.”

5. What is considered as an “artistic work”?

• A book or other writing;
• A play or performance of a play;
• A musical composition or the performance of a musical composition;
• A painting or other picture;
• A sculpture;
• Traditional or fine crafts;
• The creation of a film or the acting within a film; or
• The creation of a dance or the performance of a dance.

6a. "A magazine (sells advertising) of stories, poems, essays, etc.; is the magazine itself considered an 'artistic work'?"
TG § 10-207(v)(1) provides that in that subsection, "artistic work" has the meaning stated in Article 83A, § 4-701 of the Code, which is "an original and creative work, whether written, composed, or executed, that falls into one of the following categorie; 1. A book or other writing; ..."

6b. "Would the individual owner/publisher be able to take the income tax subtraction modification on income earned from the magazine?"
Because the magazine does not fit the definition of "artistic work" under TG § 10-207(v)(1), the individual owner/publisher cannot claim the income tax subtraction modification provided under TG § 10-207(v)(2) for income earned from the magazine.

6c. "Do Individuals paid for the stories they submit qualify for an income tax subtraction modification from them?"
An individual author who is not an employee of the magazine would qualify for an income tax subtraction modification under TG § 10-207(v)(2) in the amount of the payment from the magazine for the author's original writing submitted to the magazine if:

1. the author conducts a business in the arts and entertainment district in which the author created the original writing (by submitting the author's original writing for sale to the magazine from within that arts and entertainment district); and
2. the author owns or rents residential property in the county where that arts and entertainment district is located.

7. "If an artist lives in the county and teaches art-related subjects in a store / classroom within the District, is that income eligible?"
TG § 10-207(v)(2) provides that the income is eligible for the subtraction modification is the amount of income derived from the publication, production, or sale of an artistic work that the artist wrote, composed, or executed in the arts and entertainment district. Income derived from teaching art-related subjects is not income derived from the publication, production, or sale of an artistic work. Therefore, income derived from teaching art-related subjects is not eligible for the subtraction modification under TG § 10-207(v)(2).

8. "If an individual lives in the county and has a company in the District that reproduces another's artist's work, does the income from the sales of the reproductions qualify for the modification?"
TG § 10-207(v)(2) provides that the income elgible for the subtraction modification is the amount of income derived from the publication, production, or sale ofan artistic work that the artist wrote, composed or executed in the arts and entertainment district. TG § 10-207(v)(1) provides that in that subsection, "artistic work" has the meaning stated in Article 83A, § 4-701 of the Code, which is "an original and creative work, whether written, composed, or executed, that falls into one of the following categories..."

A reproduction is not an original work; therefore, a reproduction is not an "artistic work" for the purposes of TG § 10-207. Income from the sale of a reproduction is not income derived from the sale of an "artistic work"; therefore, income from the sale of a reproduction does not qualify for the subtraction modification under TG § 10-207(v)(2).

9. "If a qualifying artist creates within the District, then sells wholesale to galleries around the country by internet or catalog sales from a sales "center" within the District does that qualify?"
COMAR 3.04.11.02(F) provides that income received by a qualifying artist from internet, mail order, and catalog sales of artistic work created by the artist within the district that is shipped from within the district qualifies for the subtraction.

10. I think I qualify for one of the tax breaks what should I do?
You must contact the State Comptroller to determine if you are considered an arts and entertainment enterprise.

Mr. Robert Young
Department of Assessments and Taxation
301 West Preston Street, Room 808
Baltimore, MD 21201
410-767-1191
ryoung@dat.state.md.us

Mr. James Dawson, Assistant Director
Legal Revenue Administration Division
Comptroller of the Treasury
110 Carroll Street
Annapolis, MD 21401
410-260-7646
jdawson@comp.state.md.us