A Nevada Democrat introduced a proposal Wednesday that would revamp the state’s live-entertainment tax, extending fees on a range of activities and events including recreational golf and NASCAR races.
Assembly Speaker Marilyn Kirkpatrick said early estimates show that her plan could generate about $50 million in sorely needed revenue for the state budget.
Her proposal, Assembly Bill 498, is aimed at closing loopholes in the current law and eliminating exemptions that Kirkpatrick says are unnecessary.
“The goal was to be able to lower the rate and broaden the base,” Kirkpatrick told The Associated Press in an interview after the introduction.
The proposal also would impose fees on ski lift tickets, movie tickets, gym memberships and the annual Burning Man festival.
In its current form, the live-entertainment tax is two-tiered. Large venues pay 10 percent, smaller ones 5 percent. Kirkpatrick’s bill would set an 8 percent tax rate for all venues.
Existing law also exempts events with audiences of fewer than 200 people. The bill would lower that threshold to 50.
Assembly Minority Leader Pat Hickey, R-Reno, said some aspects of the bill seemed reasonable, but others could pose a problem for Republicans. He stressed he had not reviewed the bill in detail and had not talked about it with his caucus.
“From what we know so far, there’s certainly some good elements there — removing exemptions, broadening the base, making it simpler,” Hickey said. “It’s not a regressive tax, because it does talk about dollars that are discretionary.”
But Republicans, he said, “will have problems” imposing the tax on new activities such as going to the movies.
Kirkpatrick said 38 states have an admissions tax. Her bill is modeled after a similar law in Florida, which like Nevada relies heavily on a tourism economy and has no personal income tax.
Kirkpatrick and Democratic leaders in both the Assembly and Senate promised a top-to-bottom review of Nevada’s tax structure early in the session.
For the speaker, the live entertainment tax was a prime target.
During a hearing in February, lawmakers were briefed on how convoluted and exemption-riddled the tax is, prompting Kirkpatrick to lament, “How hard is it just to get rid of all of them, and start over?”
Under existing law, outdoor concerts are exempt unless they are held on casino properties. Then the tax is calculated on attendance — and sometimes food, beverage and merchandise sales.
But no tax was collected on the Electric Daisy Carnival, which drew more than 100,000 people last year for three nights running at the Las Vegas Motor Speedway. It was exempt. So is Burning Man, the counter-culture, free-expression festival held in the Black Rock Desert that draws more than 50,000. NASCAR races and sporting events also are exempt.
With 26 days left in the legislative session, the chances of passage are unclear. The Assembly Taxation Committee will hear the bill Tuesday. But Kirkpatrick said she’s game to take on the cause.
“The policy is the right policy to do,” she said. “The exemptions — somebody’s in, somebody’s out — how fair is that?”
Because it involves taxes, the bill requires a two-thirds vote in both the Assembly and Senate. Democrats would need to pick up support from one Republican in the lower house and three in the Senate.
The same vote-margin would be needed to override a veto by Republican Gov. Brian Sandoval, who opposes the bill.
“Is it a heavy lift for a meager $50 million? Probably,” Kirkpatrick said. “But I’m up to the task.
“Do I think it’s the right policy to do going forward? Absolutely.”