Nickels proposes tax break for music venues

Live music venues in Seattle should get a tax break, Mayor Greg Nickels said Wednesday.

As part of his budget proposal, Nickels intends to exempt clubs that hold fewer than 1,000 people from paying an admissions tax, which is 5 percent of every dollar of ticket sales. If the City Council approves the tax break, city revenues would be cut by $300,000, the mayor's office estimated.

Nickels did not say that clubs were suffering more than other businesses from the economic downturn, but called music and nightlife priorities for him.

"Our musicians are part of our identity as a city," Nickels said at a news conference at Neumo's, a club on Capitol Hill. "With these initiatives, I look forward to building our reputation."

The Nickels administration has had a tough relationship with the nightclub industry in recent years.

The mayor cited his work establishing an Office of Film and Music and getting rid of the teen-dance ordinance. But he has also taken steps to close clubs after violent incidents and proposed requiring nightclubs to obtain a special license.

Last year Seattle police conducted an undercover sting operation on underage drinking at 15 bars and clubs. While the city filed criminal charges against dozens of people, most of the cases have been resolved without jail sentences.

Steven Severin, one of Neumo's owners, said he would use the tax break to give musicians a larger percentage of ticket sales. "This is destined to put more money into the pockets of musicians," he said.

The proposed exemption does not specify what club owners should do with the money they save on taxes.

The city's admissions tax now applies to sporting events, movie theaters and other entertainment events.

The mayor's office estimates 65 venues could take advantage of the tax break. Clubs that have a capacity of fewer than 1,000 people, present live music three times a week and hire 16 musicians a week would qualify.

"Out of our particular [budget] priorities, none of the six were music venues," said the council's budget chairwoman Jean Godden, who said members will look at what kind of revenue would offset this exemption. The council has said it wants the budget to focus on public safety, human services and housing, transportation, neighborhood planning, pedestrian safety and the environment.

The mayor expects to present his budget proposal Sept. 29.

Sharon Pian Chan: 206-464-2958 or schan@seattletimes.com