Frequently Asked Questions on Forms MO-1ENT and MO-2ENT

1. What is included in the gross contract dollar amount? The gross contract dollar amount is the total compensation without any expenses deducted. For example: If a venue charges the entertainer for the use of its facilities, the charge is not deducted before the 2% withholding.

2. Are guest speakers who lecture at universities, high schools, businesses, etc. classified as entertainers for this new law? No, guest speakers are not considered entertainers. However, if an admittance fee is charged, 2% of the nonresident entertainer's gross contract amount should be withheld.

3. Who is considered a nonresident entertainer? Individuals, partnerships and corporations not residing in Missouri who entertain other people for compensation by performing any vocal, instrumental, musical, comedy, dramatic, dance or other performance before a live audience. This includes persons traveling with and performing services on behalf of a nonresident entertainer who receive compensation, such as a setup crew.

4. When do I give the entertainer a copy of Form MO-2ENT? A copy of Form MO-2ENT can be given to the entertainer when the compensation is paid to the nonresident entertainer, or when Form MO-1ENT is sent to the department.

5. How do I split the withholding between various employees (example: members of a band)? Missouri requires 2% of the total compensation from the performance and does not require you to split the withholding between employees. However, if one member of the entertainer group, such as a band member, files a Missouri individual income tax return, the withholding will need to be prorated among the band members and other paid members. The entertainer entity (the band) should determine the correct amount for each individual member to claim. A corporation can take the entire withholding credit on its corporate return.

6. How do nonresident entertainers claim the money withheld by the venue? Individual nonresident entertainers can claim their prorated share of the withholding on line 43 of the individual income tax Form MO-1040. Corporations can claim the withholding on line 18 of Form MO-1120 for corporations. The nonresident entertainer must also attach copies of Form MO-2ENT showing the withholding. (See question 5 above if the withholding needs to be split.) NOTE: Missouri does not require nonresident entertainers to file income tax returns if all the venues at which they have performed have withheld the 2% and the nonresident entertainers have no other Missouri source income.

7. Who is responsible for withholding when the venue is paid a rental fee and the booking agent/promoter pays the entertainer? The purpose of the new law is to make the resident party making payment to the nonresident entertainer responsible for the withholding. Therefore, the venue must collect and remit the 2% withholding on the total compensation when the agent/promoter is a nonresident. Two percent (2%) must be withheld from the agent/promoter’s compensation as well. If the booking agent/promoter is a Missouri resident, the withholding can be done and remitted to the department by the resident agent or promoter. The venue must submit a list to the department of any resident agent/promoter renting its facility for a performance. (Include entertainer's name.) The listing must be sent quarterly to the Missouri Department of Revenue, Nexus Section, P.O. Box 295, Jefferson City, Missouri 65105- 0295.

8. What happens if a venue does not withhold? The venue could be assessed a non-filer assessment or the nonresident entertainer(s) will fall under the transient employer law. The entertainer(s) must then register, post a bond and file withholding tax returns with the Department of Revenue.

9. Are IRS 501(c) 3 not-for-profit corporations exempt from the 2% withholding on nonresident entertainers? No, the not-for-profit corporation should pass the 2% withheld down to the employee.

10. Is a foreign entertainer exempt from the 2% withholding on nonresident entertainers? Foreign entertainers are exempt from state withholding if they are exempt from federal income tax.

11. Do I have to withhold 2% if the entertainer makes $300 for a performance? No, you don’t have to withhold the 2% if an entertainer makes $300 or less per performance.

12. Is there a penalty for filing the MO-1ENT and MO-2ENT late? Yes, the venue will be charged penalty and interest if the MO-1ENT and the MO-2ENT are not filed by the due date.