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Unusual Tactics by Tax Men


 Bangalore: Entertainers or tax collectors?

In the French film Le Dîner de Cons, a French tax collector is depicted as a man who gleefully works late into the night to audit a wealthy man and catch him with more wealth than he has claimed. As the auditor approaches, paintings and sculptures are stuffed into closets and expensive wine is replaced by vinegar. Desperate measures are taken to ensure the tax man won't see all the wealth M. Lhermitte actually has.

But would the tax man actually show up at an apartment in the middle of the night, notebook in hand?

Perhaps. Read on for two tales of bizarre behavior inspired by sales tax.

Shreveport, Louisiana

The Louisiana Cultural Districts Program was created to revitalize communities "through tax incentives." Specifically, cultural districts provide "an exemption from sales and use taxes for proceeds received from the sale of original, one-of-a-kind works of art …." Shreveport has two such districts: the Highland Community Cultural District and the Shreveport Downtown Cultural District.

It seems straightforward enough, but consider this: find me an artist who doesn't believe his or her art is "original" and "one-of-a-kind."

In an effort to sidestep this complication, Louisiana Cultural Districts define tax exempt works of art. The definition includes art that is: "original, one-of-a-kind, visual art, conceived and made by hand of the artist or under his direction and not intended for mass production, except for certain limited editions."

Ineligible media and products include "performing art, food products, life plants, music recordings and reproductions of original works of art."

When the originality of art is in doubt, vendors are advised to "seek advance advisory opinions [in writing] from the OCD to determine whether a specific work of art meets the definition of a tax-exempt work of art."

Yet it seems that not enough artists have been in doubt. The Shreveport Times recently reported that the "Caddo-Shreveport Sales and Use Tax office is bullying artists at local festivals into paying sales tax on artwork that should be exempt." According to the article, tax collectors have been approaching artists at the Texas Avenue Makers Fair for the past 18 months "demanding payment on the spot."

Gail Howell from a local tax office defended the tax man's presence at the fair, calling it "standard."  She pointed out that tax is only collected "on artwork that does not fit within the state's definition of original, one-of-a-kind visual art." Furthermore, the tax men collect from sellers who are "not registered with an occupational license to do business in the parish…. If they don't get the tax that day, there's no hope of getting it."

Chalk it up to the age-old culture clash: artists feel bullied; tax collectors say they're doing their job.

Bangalore

Meanwhile in Bangalore, the tax man is taking even more unusual steps to inspire payment. Hemispheres Magazine reports that The Tax Man Drummeth.

If you neglect to pay your taxes in Bangalore, you'd better have a good supply of earplugs. The Bangalore city council pays tamate drummers to "perform outside the residences and businesses of tax evaders." The idea is to so thoroughly annoy the tax evaders that they'll cave in and pay up.

A dose of public humiliation is thrown in for good measure. Drummers "come with banners bearing their target's name and the amount owed, and aim to embarrass and annoy deadbeat into submission."

Does it work? Apparently it does. According to Madappa, a clerk in the city office, "This is much cheaper and faster than prolonged litigation in the courts. Quite often, the defaulters cough up at least part of the money owed."

The Solution

Don't let yourself be bullied or shamed by the tax man. Pay your sales and use tax on time. Automation can help.

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photo credit: ZeHawk via photopin cc


Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.