The New Orleans City Council voted Aug. 8 to exempt organizers of some small art markets from a tax collection push by Mayor LaToya Cantrell’s administration that has already caused organizers to cancel several events since the spring.

In April, the Cantrell administration started interpreting a 1956 bond requirement seemingly designed for large events like car shows as applying to most special events in the city, including art markets. That law requires organizers to purchase a $10,000-$20,000 bond by putting a small percentage of that full amount down. Market organizers could then be on the hook if all the vendors at their event do not pay sales tax to the city in time.

Under Council Vice President JP Morrell’s proposal, organizers of admission-free events with less than 35 vendors who have two or less vendors that accept cash. Originally, Morrell’s office had capped the exception to events with less than 15 vendors but increased it after talking with organizers.

Morrell’s measure also shortened the time the city could hold onto the bonds, from four months to one month. He said that time period was too long given that vendors are supposed to pay sales tax to the city within 10 days of a given event.

Morrell, who brought the measure forward, called it a “triage” and said his office was working on a more long-term solution.

“The law has not been updated, and it’s very archaic,” he said. “I would love to have a larger conversation on how we correct and improve the law.”

The Cantrell administration previously told Gambit they did not have estimates on how much revenue they believed they were losing in unpaid sales tax at markets.

But they appeared to have provided council members with at least some data. On Thursday, Morrell said, “The challenge we have is that when we look at data from [the Bureau of] Revenue on certain markets, we have markets that have over 200 participants, and Revenue has the receipt showing 20 remitted sales tax.”

He did not say which event that was.

At the same time, Morrell also questioned the Cantrell administration’s new reading of the law.

“The interpretation is murky, and it is kind of jarring,” Morrell said.

Some popular markets aren’t covered

Even with Morrell upping the market vendor cap to 35, organizers of larger markets like the popular Freret Street Market will still need to get a bond. The monthly market, which started in 2007, averages around 80 vendors.

The Rotary Club of New Orleans Riverbend puts on the markets, as well as the annual and larger Freret Street Festival. They say they donate their proceeds to charities, including recently foster home Raintree House, food bank Culture Aid NOLA and the Junior League’s diaper bank.

“The bond requirements will take away from those charities that we support,” said Timothy Paulin, the rotary club’s president-elect.

Jordan Koppins, arts market manager for Arts New Orleans, said they have 10-15 vendors at markets in slower months but get up to 80 during the holidays.

And while nonprofit Bayou Yacht Club has hosted smaller events, their largest events have had more than 50 vendors.

“We ceased operations entirely following the bond ordinance,” founder Anna Schnitzler told the city council. “The inconsistencies and unpredictability of the event permitting process as a whole have made it untenable to host an art market in this city.”

Confusion about bonds continues

The city suddenly applying the bond requirement to art markets caught many organizers, including longtime ones, off guard.

Joycelyn Reynolds, president of Arts New Orleans, said in the nearly 20 years the organization had been putting on arts markets, the city never required them to get a bond. And when she went to the city for clarity, they didn’t provide any, she says.

“When we got the information from the city that they weren’t approving our permit, we’re like, ‘OK, give us more information. Where can we get a bond?’ And they couldn’t give us the information,” Reynolds says.

Likewise Michelle Ingram, founder of Freret Street Market and Freret Street Fest, said she also was unsure where to get a bond from.

Morrell said his office would help Freret Street Market organizers and had been talking to nonprofits who could potentially help with the process.

“If we’re going to require people to have tax bonds, because they are very weird, specific type of bond, then the revenue department needs to be facilitating where you could even get the bond,” he said.

More work ahead

Morrell said he’d be open to conversations about expanding the cap on vendors for events that go cashless, since the city could automatically collect tax on those sales. However, vendors say they like to accept cash to avoid fees on credit card purchases.

“Today is really a triage on trying to make sure that a lot of the reoccurring markets are uninterrupted, but it’s not the end of the conversation,” Morrell said.

But organizers have already canceled events since the city started requiring the bonds.

In addition to Bayou Yacht Club shutting down its markets, Laffite Greenway director of community programming Alexis Marceaux said their organization had also canceled events because of the policy.

The Rotary Club of Riverbend is trying to determine if they should move ahead with planning their October market.

Morrell also said the 1956 law doesn’t really fit art markets where people are signing up a week or so in advance and organizers may not have an exact vendor count until close to the event.

“We need to have more groups come in, provide more information and see how we can fix these different parts that really just don’t work,” he said.

“Thank you for drilling down to these finer points, because that’s where we live,” Ingram said. “That’s where we producers live.”