Star-Bulletin Features

Thursday, June 7, 2001

Amy Hanaiali'i Gilliom and Willie K will perform
at Henry Kapono's new nightclub at Aloha Tower
Marketplace tomorrow.

Artists celebrate
tax break

The line-up

By Tim Ryan

A "Hawaii Digital Jam" at Henry Kapono's new nightclub at Aloha Tower Marketplace tomorrow night will celebrate a new bill that proponents say can help make the state the entertainment capital of the world.

The event, starring Kapono, Willie K, Amy Hanaiali'i Gilliom, Keali'i Reichel, Robi Kahakalau, Barry Flanagan, Kalapana, Colón and special guests, will run from 5 p.m. to midnight. Admission is free by ticket, although there will be an enclosed, private VIP area.

Under the state Legislature-approved House Bill 175, artists creating their work in Hawaii will receive a major tax savings. Both artists and companies who own copyrights will be eligible to receive tax breaks to live, work and create in Hawaii.

Lt. Gov. Mazie Hirono will sign the legislation into law at 5 p.m. at Kapono's just prior to the concert.

"If you're involved in the creative process, and you derive your revenues from that, this bill excludes you from paying taxes on that gross revenue," said Bill Meyer, a Honolulu intellectual-property attorney.

An artist with his own label would save as much as $5,000 in taxes on a $65,000 gross income from his craft, Meyer estimated.

"This bill makes it clear that the artist receives the same benefits as a record company," he said.

The bill also provides a 100 percent credit for investments in qualified tech businesses, including sound recordings, movies, television programs, computer animation, flash movies and Web-based products.

The credit is structured to return 100 percent of a Hawaii investor's equity investment in a qualified tech company over five years, and it is front-loaded so that the majority of the investment is returned in the first two years.

"The groundbreaking legislation makes the state a digital agora, a place where artists from all walks of life can come to create works in the performing arts," Meyer said.

The tech credit reduces the risk of "angel" investments to encourage more Hawaii individuals to consider investing in tech companies, Meyer said.

The credit also will return funds that could be made available for second- or third-round investments, he said.

The exemption of royalties generated from performing-arts products from gross income was expanded in HB175 to include the creators of performing-arts products even if the authors have assigned the copyrights to third parties or have created the products under a work-for-hire arrangement. So, the provision will help artists individually, as well as their record companies.

Under the bill, performing-arts products refers to audio, video and audio-video files; computer animation and other entertainment products delivered through the operation of a computer; and commercial television and film products for sale or license, and reuse or residual fee payments from these products.

A qualified high-technology business is defined as a business that conducts more than 50 percent of its activities in qualified research.

Meyer is hoping the legislation will bring artists to Hawaii to record their music and increase the number of concerts held here.

The "Hawaii Digital Jam" can be seen worldwide through a live Internet broadcast by logging on to at 5 p.m. Tickets to the concert are free. Listen to KCCN FM 100, KINE 105.1 FM, KRTR 96.3 FM and KXME 104.3 FM for ticket giveaways and more information.


Performance line-up:

>> 5:10 to 5:50 p.m.: Colón
>> 6:05 to 6:45 p.m.: Keali'i Reichel
>> 7 to 7:40 p.m.: Kalapana
>> 7:40 to 8:20 p.m.: Amy Gilliom, Barry Flanagan, Ledward Ka'apana and Cyril Pahinui
>> 8:50 to 9:30 p.m.: Henry Kapono
>> 9:45 to 10:25 p.m.: Robi Kahakalau and Fiji
>> 10:40 to 11:20 p.m.: Willie K (set 1)
>> 11:35 p.m. Willie K (set 2)

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