When Music Became Tax-Exempt: Jazz

By the 1960s, rock music had eclipsed the popularity of jazz, and jazz has yet to regain its position as truly popular music in the United States. Sales of jazz account for about 1% of music sales generally (though jazz moves physical copies more than other genres). Why did it get overthrown? The introduction of rock’n’roll in the mid-50s started the job (though some of the bestselling jazz records ever were released or recorded in 1959), and then, by the mid-60s, the Beatles and other British Invasion groups finished what Elvis had begun.

Well, kind of. Jazz was dead, but only if by “dead” you mean “no longer the center of pop music.” Frankly, the contemporary jazz scene may be the most vibrant, interesting, and diverse that jazz has ever been.

So how did jazz survive? Interestingly, in 1965–a decade after Elvis signed to RCA and a year after the Beatles invaded the United States–the IRS issued Rev. Rul. 65-271. The Revenue Ruling expressly provided that promoting jazz was an acceptable tax-exempt purpose:

Cultural organizations devoted to the promotion of the arts may qualify for exemption as being educational or charitable in character. See Rev. Ruls. 64-174 and 64-175, C.B. 1964-1 (Part 1), 183 and 185, respectively. By presenting periodic jazz festivals or concerts, as described herein, the organization in question is developing and promoting an appreciation of jazz music as an American art form.

Did tax exemption save jazz? I don’t know; I tend to doubt it, but I also know that tax-exempt organizations are critical in the continued viability of the art form. It is interesting, however, to be able to pinpoint the moment when jazz transforms from popular entertainment to an appropriate subject of tax exemption.

Samuel D. Brunson

Photo by U.S. Dept. of State, Agency for International Development. [Festival de Jazz de Cannes].