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stage fees/rent/etc
I was just wondering if anyone can tell me what exactly stage fees/rent/whatever the clubs call them go towards. I am under the impression that it is just money that goes directly to the managers pockets. Does anyone know? And is there a difference between stage fees/rent for independent contractors vs. employees? Thanks :)
Morgan
[email protected]
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Re: stage fees/rent/etc
I think it'd vary by club. But yeah, it's for the management to do with as they please. There is overhead involved in running a club, but you know it's not as high as the money they make! But that's the nature of the business....get as much as you can.
I'm not sure I understand your questions about "rent" and "employees", but I think you're talking about a regular business owner that owns their own business. And I would say there is a difference between stage fees and rent because rent you pay whether you go in to work that day or not. It doesn't increase if you're late. You don't have to give a portion of your profits to your landlord.
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Re: stage fees/rent/etc
It's Rent from the perspective of the clubs accounting. You are renting the Stage, Dressing room, and pvt dance facilities from the club on a scheduled basis (ie: stage when its your turn to dance ....Your Dressing room area .... ect.) Think of it more like renting a Hotel room by the day rather than renting an apartment on a years lease. That room (in Vegas for example) can cost $50 a night when the town is dead but during comdex can cost $500. Late fees are much like the charges for a late checkout. (backwards but the same principle). Its the same accounting for Independant contractors and Statutory Employees.
This money goes to pay for advertising, utilities building amortization (rent or payment) ect. and adds in with the door money to cover these costs. The BAR money is technically where clubs attempt to profit. In an average decent club ...nightly expenses can run $1000.
To answer your question ...the Stage fees go IN THE BANK to pay bills.
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Re: stage fees/rent/etc
there is a distinction between a club which classifies its dancers as "Employees" and one that classifies its dancers as "Independent Contractors". It's actually illegal for clubs to charge "Employees" stage fees, based on the legal definition of an employer and the employer/employee relationship. On the other hand, it's legal for clubs to collect 100% of private dance and champagne room money from "Employee" dancers, only having to pay them an hourly wage.
"Private Contractors" are an entirely different story. The best analogy I can come up with is that the clubowner is like the owner of a shopping mall, and that dancers are like shopkeepers. The club=mall owner provides the physical facilities (stage=storefront) for the dancers=shopkeepers to do business, plus the club=mall owner provides security, lights, heat, advertising, insurance etc. In exchange for providing these things, the club=mall owner is paid by the dancer=shopkeeper. That payment can either be in the form of a fixed fee (mall rent= stage fee) or in the form of a percentage (X% of products sold = Y% of private dances sold), or both.
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Re: stage fees/rent/etc
Lemme give this distinction a shot. Actually there are 3 types of dancers from an employment point of view. Independant Contractors, Statutory Employees, and Regular Employees.
Independant Contractors are thier own businesses and simply rent the Clubs facilities for thier performances. Legally they should pay a fixed fee for this "rent" but a % basis can be defended.
Statutory Employees are those who work for TIPS or on a commission basis. Much like waitresses and Real Estate agents (some cosmetologists, insurance agents ect.). They should be paid a base wage (usually half the minimum wage) and should keep ALL thier stage tips while keeping only a portion of any SALES such as VIP's or lap dances and drinks/promotional items. In this case the Club is selling the lap dances rather than the dancer and may have to pay sales tax on them in some States. This is the percentage based fee schedule.
Regular Employees actually recieve ONLY an hourly wage or monthly/yearly salary and are not legally entitled to keep ANY tips so in this case there should be NO Stage fee or rent. Very few dancers fall into this category however.
Stripping has, in the past, been considered an underground income source as a cash based business but this IS Changing. The Government WANTS it's cut of both the dancers income and the clubs (in the form of sales taxes and FICA-social security payments).
Although it's been downplayed ..... the finding of almost ONE BILLION US DOLLARS in cash in Iraq is going to have a major effect on the stripping industry here at home. The good old days of stripping providing a tax free income are fast fading away.
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Re: stage fees/rent/etc
yes, DJ that's it exactly. The new California law and the proliferation of "Corporate Clubs" clearly shows that a trend away from dancers being Independent Contractors and toward dancers being Statutory Employees is underway. In fact the new California law comes right out and clearly states that dancers in California are to be considered Statutory Employees, even though most California clubs and dancers seem to be ignoring the requirements of this new law.
The IRS is also actively pursuing the taxation of tipped employees. However, this year they seem to be concentrating on even more obvious targets, i.e. waitresses, dealers and other tipped employees working at Casinos. In fact, the news has recently reported that the IRS and Casino Owners have struck a deal where in exchange for the IRS dropping in-depth investigation of Casino books and potential under-reporting of income charges, the Casinos have agreed to start issuing Statutory Employee 1099's to their tipped employees with an estimated amount of tip income included in the reported amount. I am absolutely certain that the "Corporate Clubs" will be forced to follow suit once the auditors finish with the "bigger fish" and get to them.
The impact of dancers actually being treated as Statutory Employees cannot be overestimated. Obviously one major consequence is the reporting and taxation of a larger percentage of dancer income. Another more subtle consequence is inclusion of other money in the reported income figure. For example, under tax law as I understand it, Independent Contractors who are legally in business for themselves can deduct all "costs of doing business". One major "cost of doing business" is stage fees and private dance percentages which the dancer must pay to the club. But under the same tax law, Statutory Employees are not allowed unlimited deductions of this nature (there is a 2% cap). This potentially means that if a girl is considered an Independent Contractor working at a hypothetical club where she pays a $50 stage fee per night, earns 100 in stage tips, and sells 20 private dances per night at $20 and must split this money 50-50 with the club, that her gross income for the night would be -$50 stage fee +$100 tips + ($400/2) private dances = $250, resulting in perhaps a $50 tax bill (in a 20% tax bracket) = $200 net earnings for the night. On the other hand, as a Statutory Employee, once her 2% limit is exceeded by February or so, the picture changes significantly. As a Statutory Employee, working at the same hypothetical club would result in a very different taxable income i.e. $100 +$400 = $500 (since the stage fee and private split are no longer deductible). This would result in perhaps a $125 tax bill since the higher taxable income would push her into a higher 25% tax bracket. Therefore net earnings after taxes for the night as a Statutory Employee would be -$50 stage fee + $100 tips +(400/2)private dances -$125 tax bill = only $125 compared to $200 as an Independent Contractor !!! This "simple" change in tax classification would cut this hypothetical dancer's hypothetical take home income after taxes by 37% versus Independent Contractor taxed income of $200 and exactly in half versus a totally unreported untaxed gross income of $250 !!!
The absolute worst part of this classification change is that it is legally in effect right now in California but is being ignored. When the IRS and Cal state tax people do get to the corporate clubs, and the corporate clubs cut the same deal with the IRS as the Casinos to save their own butts, some absolutely shocking back tax bills might start arriving at dancers' doorsteps. For example the IRS hitting California corporate club dancers with tax bills for an estimated $125 a night in unpaid income taxes would amount to over $30,000 over the course of last year since the new California law was passed, plus penalties and interest!
Actually I doubt this will happen, but 100% income reporting and taxation are slowly but surely creeping into the world of dancing. Personally, I have always reported all of my income and all of my business expenses as an Independent Contractor, if for no other reason than because my internet businesses, modeling and featuring resulted in all sorts of financial paperwork and business expenses. But 100% income reporting for dancers will create fundamental changes in the way clubs are run and in the way dancers work in the future compared to the "cash" basis many operate under today. As you pointed out, the new anti money laundering procedures put into effect after the WTC disaster have already "lowered the radar" in regard to the IRS discovering unreported income via feedback from banks, state real estate and vehicle registrations, brokerages etc. It's now virtually impossible for a person to claim $20,000 in income yet have a $5,000 bank balance increase, a new car registered, and a $10,000 investment portfolio increase without IRS sirens going off.
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Re: stage fees/rent/etc
And ...in the longer term ....the Government is now supporting the move away from Cash altogether which will solve all thier accounting (and printing) problems in one swoop. Won't THAT suck.