Texas Music Venues Could Receive Rebates Up to $100,000 Under New Program

First-of-its-kind Texas Music Incubator to offer alcohol tax refunds

Have a Nice Life at Mohawk on June 16 (Photo by Wayne Lim)

The Texas Music Incubator Rebate Program, signed into law back in 2021, now has the funding to provide eligible music venues across Texas with up to $100,000 annually in alcohol tax rebates.

Under the program, geared toward smaller and independently owned businesses, state music venues are now classified separately from bars and nightclubs. This distinction is the first of its kind in the state and the country, and allows Texas venues to opt in to a tax rebate program that can help offset the costs of producing live music events not typically seen at other alcohol-based businesses.

Without a designated budget for the initiative, the program could not be executed when it was first passed two years ago. Now amended, it will draw from a percentage of a qualifying venue’s mixed beverage sales from the previous year, and refund that amount to the venue, with a maximum return of $100,000.

Most eligible applicants will fall under two categories: music venues with an audience capacity under 3,000 people, or music festival promoters holding a festival in a county with a population of less than 100,000 people. Within those categories, an applicant must meet another handful of requirements, ranging from holding live music performances at least five nights a week and charging a cover fee, to having a performance space and employing specialized personnel like audio engineers and bookers. View the full criteria here.

The budget for the incubator, $20.2 million allocated equally across two years, was granted last month before the end of the 88th Texas Legislative Session. “This is a game changer for music venues, who typically operate on a razor-thin margin under the best of circumstances,” says Texas Music Office Director Brendon Anthony.

In 2021, many Austin music venues received COVID-19 relief via the city of Austin’s Live Music Venue Preservation Fund and the national Shuttered Venue Operators Grants. Although the new incubator program was designed with COVID-19 relief in mind, efforts to finance venues have been ongoing for nearly a decade, championed by advocates of the local music scene like Music Venue Alliance Austin President Rebecca Reynolds. During the pandemic, she noticed a collective instability among venues and said owners had to make massive adjustments to keep their businesses open.

The budget for the incubator, $20.2 million allocated equally across two years, was granted last month before the end of the 88th Texas Legislative Session.

“Some venues that have stayed in close contact with me throughout this process were on the edge of their seat because whether we got funding for this program was going to determine whether they renew their lease or not,” Reynolds says. “In other cities, many venues are able to purchase their property, but Austin property is not something a venue owner-operator can afford on the budget of the venue alone.”

Stephen Sternschein, co-owner of Empire Control Room & Garage and Parish, says Austin music venues especially need subsidies following the pandemic’s effects, and notes obstacles like high staff turnovers and a decrease in the public’s appetite for experiences.

“We have to pick and choose which shows we do,” Sternschein says. “We try to sell enough tickets to cover the cost of the event and the artists, but because of changing consumer habits, shows that worked in the past don’t work anymore, particularly on the local tip. The combination of inexperienced staff and dampened consumer enthusiasm in the sector means there’s less opportunity for us to take risks and put together shows that are meaningful to our community but aren’t going to turn a profit.”

According to Sternschein’s estimates, $100,000 from the Texas Music Incubator Rebate Program could generate up to 20 more nights of concerts at his venues.

“There’s typically three artists performing [per show], so every year, we’re able to pay staff to work 20 extra days, we’re able to pay close to 100 bands to perform and have another show,” the Red River Cultural District president says. “That’s the way I see the potential benefits of this program. Through the subsidy, it helps us to get back some of the events and opportunities we wouldn’t have been able to access otherwise if we were just on our own.”

While the program has yet to announce a roll out date, the Texas Music Office will oversee its application process and eligibility criteria as the department starts from the ground up. Once its two years are finished, Anthony says he expects that someone will have to advocate on the program’s behalf each legislative session to redirect the funds back.

“I feel things like this get one chance to come out of the box correctly,” the director says. “The amount of effort that it’s going to take is appreciative, but we’re looking forward to it because we believe this program is going to be so helpful to a very, very important part of the ecosystem.”

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Music, Texas Music Incubator Rebate Program, Brendon Anthony, Music Venue Alliance Austin, Rebecca Reynolds, Stephen Sternschein, Empire Control Room & Garage, Parish, Brendon Anthony, Texas Music Office, Texas Legislature

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