Issue link: http://winesandvines.uberflip.com/i/619725
January 2016 WINES&VINES 147 MARKETING 3435 Ocean Park Blvd, #107-511 ~ 10 rue François Appert – BP 90095 21703 Nuits Saint Georges Cedex France Metal labels by www.elitelabel.com Donniella Winchell, executive director of the Ohio Wine Producers Association and cur- rent chair of WA's state and regional advisor counsel, confirmed the widespread confusion. "First, understand it's very difficult. It's not legal to avoid compliance. The licensing agen- cies are within their rights within the law as it stands. But there are exemptions and oppor- tunities within the law. "Do not violate or challenge them," she ad- vised. "Understand and get educated. No one understands which artists are signed to which entity. There is not just one license for all." Some new wineries call Winchell when they've heard from a licenser, and say they'll just ignore the notices. Although the agencies cannot legally negotiate prices, "There are ways to address the issues. You cannot keep throwing notices in the garbage. They will find you, and you will lose. My best advice: Know the law and address ways to legally comply," she said. Winchell also recommended that wineries participate with organizations like WA that are attempting to change antiquated formulas es- tablished in the 1950s. "In the old days, ASCAP had to physically hear the music," she said. Internet and social media publicity have changed all that. Obviously, the wine industry has also changed. "In Ohio we have 200 wineries em- ploying 5,000 people. We're an economic en- gine. In Northeastern Ohio, in 2014 our 22 wineries spent $3.2 million on musicians. We want to keep it moving and move with the rising tide. We want to be in compliance, but the burden's onerous. Candilora at ASCAP specified a rate sched- ule for wineries. "In simple terms: For areas open to the public, or dedicated to entertain- ment food service, our fees are $375 per year for recorded music; $642 per year for live. Licensing managers here at ASCAP can advise wineries. Live concerts are different: Those with 'hard tickets' charging admission that produce gross revenues greater than $100,000 are assessed 0.8% after the fact." Are licensing costs deductible business ex- penses? Outgoing Wine Institute counsel Wen- dell Lee said he hadn't heard of any recent collection activity. He added: "With respect to the deductibility of copyright licensing fees, I'm not an accountant, so can't provide much in the way of reliable information. If I had to guess, I'd say that the licensing fees are ordi- nary and necessary expenses in the operation of the business and should be deductible." CPA Tracy Bolton from TBI Consulting of San Diego, Calif., said: "No one wants to com- mit to a for-sure answer. But it's a business expense that falls under this IRS rule of thumb: To be deductible, a business expense must be both ordinary and necessary. An ordinary ex- pense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary." Even though WA and its cohorts at MIC Coalition hope the rules and fees may soon be clarified and modernized, wineries of all types should study the current regulations and do their best to comply. A tasting room without music would be a dreary place indeed. " My best advice: Know the law and address ways to legally comply." —Donniella Winchell, Ohio Wine Producers Association