International and Exchange Students Selling Art

1. International and Exchange Students Selling Art Aaron Colhapp, Macalester College Bruce Gawtry, Macalester College and University of Minnesota Alexis Akagawa, Minneapolis College of Art and Design

2. Goals • Understand the implications of international students selling art and other money-generating efforts. • For you as a practitioner, to be able to advise the art and non-art majors.

3. Agenda • Art Student Issues • Department of Homeland Security • Case Studies • Annotations for OPT and CPT • Other Means of F-1 Income (Legit or. . ) • Resources • Q & A

4. Art Students • Do our students create unique one-of-a kind items or is art an industry? This shows the challenge of employment confusing for art students. • Art students are unique because they make stand-alone independent objects. Their job as a student creates evidence, for example, pieces of pottery or preliminary drawings for a finished painting. Every piece of art is an independent object no matter if it is functional or not. • Those objects must be made multiple times as practice. However, every object created even if only for practice is a piece which stands alone.

5. Art Students • Artists are entrepreneurial and practice the business of art. Most art is exhibited for a fee and bought or sold more than once even if the object is made for personal expression and not for sale. To clarify about art employment, there are two separate issues: 1. Artistic activities 2. Artistic objects such as visual/physical, written or musical compositions

6. Artistic Class Activities • A course may require a great deal of foundation work, yet one final piece • Or production of art for sales beyond the class requirement • Or performance for audiences - if the coursework is required vs. optional (paid/displacement or competing for roles) • Or sales/marketing - basic requirement for course assignments vs. profit motive

7. Artistic Objects • Produced as course requirements • Includes required exhibits - part of the art degree (visual/electronic/sculptural/writing/books/magazines/poetry/ composition/songs) • Sales are incidental to required displays

8. Artistic Objects (continued) • Because of art object production, the art student is making an object which can be sold. • Frequency: • is making 15 pieces of pottery illegal or is it o.k.? • How about 100 plates or bowls? • The amount of work must be based on course requirements. • Is there a difference between theater or literary performance and production? • No. The real difference would be intent to be paid or compete for a paid sold beyond the course requirement.

9. Department of Homeland Security • Art sales and marketing are too specific to have general policies or regulations written just for art students. • Art employment must conform to general employment policies and regulations. • SEVIS Headquarters (HQ) has not specified “general” rules for international students who are artists. • Refer to Employment Q and A (2005 NAFSA Conference) • Some specific art questions are imbedded, but not general policy.

10. Scenario 1 An F-1 Japanese student needs models for a photography project. • As an incentive to recruit subjects, the student offers discount haircuts at $5 per model. • The student posts fliers all over campus to recruit models. This would be illegal employment.

11. Implications to the Scenario • Did the haircut take place on or off campus? • Did the haircut take place in a gallery and incorporated into the photographs? Were the haircuts part of the performance? • Can a College employee (for example the student affairs activities coordinator) act as the F-1 supervisor and as casual labor? Then it would be on-campus employment. • Does the haircut conform to a higher standard like a salon? • Does the action replace a U.S. worker?

12. Scenario 2 A German F-1 one-semester, exchange student wants to sell his paintings in the college sponsored art sale on campus. • The college would be the selling agent taking a 20% commission. The college would be the tax withholding agent. • The college publicizes the event in coffee shops and neighborhoods off campus. • Would the college be in trouble for selling the student’s work in the sale, in the college shop, or in the gallery? • Would it be considered on-campus employment?

13. Implications to Scenario 2 • Open houses display art. Pricing at open houses is different than if the gallery intends to sell a piece. • Pricing is part of the job definition by assessing the value of the art object wand the artists finds a buyer in the target market. • If the price is listed on the plaque description next to the artwork, that is o.k. However if the student profits afterwards and the intent is to make money, then that is not o.k.

14. 2 (continued) • If the student to avoid taxes then proposes to set up a final exhibit in the gallery and sell directly to the patron, does this constitute sale of personal items? No. The student stated no intent to file taxes in person with an Individual Taxpayer Identification Number (ITIN) number upon return to home country.

15. 2 (really really continued) • If part of the course requirement is on-campus sales incidental to meeting the basic course requirement, this is o.k. • Personal items - if owned and sold will require capital gains tax. However, art objects are generally not owned for personal use (such as cars, stereos, refrigerators, etc.) • Check with the IRS for tax needs. http://www.klaskolaw.com/articles.php?action=view&id=55

16. Scenario 3 An Egyptian F-1 student is contacted by a professor who wants to create a mural on another campus without “compensation.” • Is this employment?

17. Implications to Scenario 3 Questions to ask the student before advising them: • Is the mural preplanned or spontaneous? • Is the mural commissioned by committee with funding? If so, then it is illegal. • If it was for fun and spontaneous, it is not illegal. If there was never an attempt to pay the student or the student rejected an efforts at being paid and was willing to do it for free. . . Then the international student is permitted to paint.

18. 3 (continued) • Doesn’t this count as “volunteering?” • If a student was unpaid and did not displace another muralist who would be paid, then the mural painting could be considered “volunteering”. Which leads us into the next scenario…

19. Scenario 4 An F-1 student “volunteers” at an advertising agency during the summer without telling the DSO • The student says he did not receive monetary compensation but instead an airline ticket to a conference in New York City. • What does the DSO do?

20. Implications of Scenario 4 Immigration law does not specify any monetary forms. • The law speaks about “remuneration”. • Gift certificates, food, lodging and conference fees are all payment for services in kind. • The DSO is not an ICE enforcing agent. There is no proof through a 1099 filed with the College to prove that indeed the student did accept remuneration or quid pro quo. • The DSO does not report, but if USCIS reviews IRS documents for a permanent residency green card application, receipt of funding might come up. The student runs the personal risk and denial of a future benefit.

21. Non-Course Art Production • Hobby art activity is o.k. if the objects are not made or created to sell. • These objects are for self-expression only. • If the intent is to sell, it is no longer considered a hobby. • Keep sales/expense report and receipts to justify as hobby income for tax purposes if there is an unplanned sale.

22. Annotations for Curricular Practical Training (CPT) and Optional Practical Training (OPT) • Animation • Create cell and 3d computer animation by developing characters, designing or modifying environments, visualized ideas by drawing storyboards, color, inking, software programming and creating graphics. • Comic • Create multiple celled or unique graphic novels. Ink, paint and draw for editions of print/paper/book companies or web based magazines. • Film • Create digital and analog video, film footage or pictures. Student will develop, edit and participate in post-production, printing and install motion based media. • Graphic Design • Apply identity, marketing and production skills for a client or internal company projects. Student will implement electronic pre-press, color correction and printing skills. • Interactive (New) Media • Develop web projects, layout and manipulate digital media, animate sculptural kinetic installations, process audience/patron/client interface systems. Student will use sensors, switches, hardware and program software. • Painting/Drawing/Illustration • Stretch canvases, gesso surfaces, design, install artwork in galleries and museums. digital printed images for magazines, advertisements. • Photography • Expose film or process digital photos.Develop, print, install, matte or curate images in commercial, documentary or fine art environments.

23. Other Sexy F-1s Means to Income Investing - Passive - Entrepreneurial Club (e.g., Wash U) Prizes V. Royalties - Prizes must claim - not habitual - one-time - Royalties - Intent is the key (How did the cd get out there?) Fundraising - Benefit of the Club

24. Sexier Means Selling sperm and other bodily fluids • Eggs, plasma, kidneys? • On-campus tests (MRI, Cold studies) • Issues to consider: displacement, limited hours • Patents (Many issues - get lawyer) • Babysitting • Selling books, knives, magazines • What are your strange situations?

25. IRS form 1099 • If the student produces work and the college is the witholding agent, the student must obtain a form 1099. • It is for an individual who is not employed by the college when the cumulative calendar year reportable income is $600 or more. The form is sent by the college by January 31 of the following year. • Students are entitled to proceeds less the college commission of 20%. Galleries often take 50%. • The income falls within the general types of non-resident alien income subject to 30% witholding rate unless the student is exempted by tax treaty.

26. Tax Treaties • Use form 8233 to claim a benefit by tax treaty for a reduced rate of witholding in addition to the 8843. • Students can receive payments for personal services for up to $5,000 per year by treaty, sometimes for as long as they remain in the U.S. and country treaties can change. • See publication 515 Witholding of Tax on Non-resident Aliens and Foreign Entities (http://www.irs.gov/pub/irs-pdf/p515.pdf) • See Publication 901 U.S. Tax Treaties (Http://www.irs.gov/pub/irs-pdf/p901.pdf) • Immigration and IRS definitions of non-resident aliens differ. Be careful when using the 1040 NR (non-resident) and 1040.

27. Resources • Dorsey and Whitney, LLP • For a tax attorney Will Goetz at http://www.dorsey.com/ • Klasko • For Immigration and Nationality Law “Murky F1 Employment Questions” H. Ronald Klasko at http://www.klaskolaw.com/articles.php?action=view&id=55 • Dr. Gary Carter • For tax courses at the University of Minnesota Carlson School of Management https://www.carlsonschool.umn.edu/Page775.aspx and as a Certified Public Accountant http://www.thetaxguy.com/ • Faegre & Benson • For tax accounting and legal questions http://www.faegre.com/default.aspx • Internal Revenue Service • For Volunteer Income Tax Assistance Program (VITA) Sites http://www.irs.gov

28. Questions • Aaron Colhapp • Colhapp@macalester.edu • Alexis Akagawa • Alexis_akagawa@mcad.edu • Bruce Gawtry • Iss@umn.edu