After years of lobbying pressure from the creative industries, the Australian Taxation Office has today signed off on a landmark taxation ruling for professional artists. The ATO’s Public Taxation Ruling: Carrying on business as a professional artist (TR 2005/1), helps artists across all art sectors who conduct their arts activity as a business for taxation purposes. Formed in consultation with a number of peak arts bodies, the ruling is tailored to artists and takes into account professional quirks unique to the creative industries. Historically, professional artists had serious difficulties grappling with tax laws that required them to fit into models from other industries. A particular stumbling block was the standing ATO position that if no profits are being made from an activity, then that activity is not a legitimate business for tax purposes. The new ruling goes a long way to refreshing the ATO’s perspective on the arts industries at large and, according to NAVA (National Association Of Visual Arts) Executive Director Tamara Winikoff, signals a ‘giant leap’ towards a new kind of status for Australian artists. ’All Australian artists, performers, writers, composers and choreographers should be celebrating today’, said Winikoff. ‘Finally, after eight years of lobbying effort, the ATO has produced clear guidelines in relation to income tax entitlements, which distinguish between professional artists and those who are hobbyists and simply making art for their own enjoyment.’ ‘The ruling is not only of interest in Australia, but is being regarded as a benchmark internationally’. NAVA has long been spearheading a campaign for artists to get equal recognition from the ATO. Working with a dedicated pro bono legal team of tax experts - Judy Sullivan, Senior Associate and Jill Savage, from Mallesons Stephen Jaques and arts lawyer Delia Browne, previously director of the Arts Law Centre of Australia - Winikoff has helmed a unified effort to turn the ATO’s head on artists – and hopefully begin a ripple effect through the country with any positive precedent to emerge. Winikoff today acknowledged the Federal Arts Minister Rod Kemp, the Department of Communication, Information Technology and the Arts and the Australia Council as other key players supportive of their campaign. Though the ruling is now legally and administratively binding and will work for most artists, Winikoff points to further necessary changes, to ensure the tax legislation is applicable to all artists (currently, some artists might not meet at least one of the 5 criteria in the Non-commercial Losses (Division 35) tax legislation - eg. those who earn more than $40,000 from their non-arts work or who do not make a profit in 3 out of 5 years). This point is currently is being examined through a post implementation review by the Board of Taxation and NAVA will continue lobbying, to assist the remaining estimated 15 - 20% of artists affected. Nonetheless, TR 2005/1 heralds a major win for the cultural sector and a fundamental move, says Winikoff, toward recognising ‘the intentions of people working professionally in the arts are to be regarded with the same respect as any other form of business enterprise.’ To download the full artists ruling from the ATO as a PDF, CLICK HERE