Oregon Employment Division

[April 30th, 2008]

Just six months ago, the Rogue Desk slammed a giant “reject” stamp on the Oregon Employment Department (WW, Oct. 10, 2007) for going after Mississippi Studios, a small concert venue and recording studio in North Portland.

In a random audit of the studio, the agency invoked a previously obscure rule to insist the small business owed the state several thousand dollars in unpaid employment taxes.

Jim Brunberg, the studio’s owner, says the touring musicians who played his venue were independent contractors responsible for their own taxes. But the state said they were his employees. In March, the two parties decided to settle, with Brunberg agreeing to pay nearly $5,000 in back taxes. But he also warned the ruling would have a chilling effect on other concert halls and the music biz in general in Portland.

Now that’s what’s happening. And the department’s renewed zeal earns the agency another round of reject stamps.

Hawthorne Theatre, an all-ages venue, and the Aladdin, the regular host of national acts, are both being audited.

“The fact that they’re auditing two successful mid-size venues in Portland on the heels of the audit at Mississippi Studios raises a question about whether they’re truly auditing people at random,” says Jeff Brown, operations manager at Hawthorne Theatre.

Department spokesman Tom Fuller says he can’t comment about any specific audit. He adds that the Oregon attorney general’s office has determined the department is following the rule correctly. “We are not out there looking for music venues to audit,” Fuller says.

At least two venues beg to differ.