Broadway aiming to keep tax break on new shows

Alexander Hamilton introduced the idea of federal taxes. Broadway producers enjoying a record season buoyed by his namesake musical are lobbying Congress to limit what they owe.

The industry, which will celebrate its success this weekend at the Tony Awards, is fighting to keep a provision that allows live-theater backers deductions in a show’s first year. That means they’d pay tax on income only after turning a profit. The provision passed in 2015, yet needs to be extended by Congress this year to survive.

In an industry where four of five performances close without recouping startup costs, producers say such a sweetener will keep the hits coming. While the provision was tacked onto a list of tax breaks last year at the behest of New York Senator Charles Schumer, there’s

no guarantee it will be continued, producers and their lobbyists say.

Some lawmakers don’t like the idea. Nor do advocates of tax cuts, who say such breaks make it more difficult to reduce the burden on everyone else.

“It’s crazy,” said Rep. Tom Marino, a Pennsylvania Republican who says he opposes an extension. “With that kind of thinking, no matter what the circumstances, if you lose money, you can write that off. And who pays for it? Middle-class taxpayers.”

At stake, according to Broadway producers, is the continued health of an industry that contributed more than $12 billion to New York City’s economy last year, bolstered by the sold-out hip-hop musical “Hamilton” and other hits like “The Lion King” and “Wicked.”

Producers say the industry’s high-risk nature precludes them from financing shows with money from banks or venture capitalists.

Of more than 50 shows offered last year, the topfive grossing — “Hamilton,” “The Lion King,” “Aladdin,” “Wicked” and “The Book of Mormon” — reaped almost a third of the total.

The issue will be hashed out before Congress ends its work, said Senate Finance Committee Chairman Orrin Hatch.

Marino, of Pennsylvania, says he’s already made up his mind.

“If these guys aren’t bright enough to put anything together that makes money, tell them to get out of the business,” he said.