Nevada legislators told of ‘loopholes’ in live entertainment tax

CARSON CITY — A panel of lawmakers spent Friday afternoon learning about Nevada’s live entertainment tax, a levy that generates more than $150 million a year but is filled with loopholes.

The tax, applied to some forms of entertainment in both gaming and nongaming establishments, has acquired a number of exclusions over the years.

The review was conducted by the Senate Revenue and Economic Development Committee as part of an overview of Nevada’s tax structure. The reviews are a prelude to what is expected to be a push for new and expanded tax levies to help fund Gov. Brian Sandoval’s $7.3 billion two-year budget, including $440 million in new funding to improve public education.

Senate Majority Leader Michael Roberson, R-Henderson, the chairman of the committee, said the 2015 session will be the one where the entertainment tax is going to be “cleaned up.”

Assemblywoman Marilyn Kirkpatrick, D-North Las Vegas, who has been trying to close loopholes and expand the tax for several legislative sessions, will have bills again this year to make the tax more fair and stable.

Kirkpatrick said she is moving away from calling it an entertainment tax, and instead sees it as a luxury tax that could be assessed on events that charge as much as $400 to $800 for an event. Individuals make the choice to spend their discretionary income on such events, she said.

The tax rate now is either 10 percent or 5 percent, depending on the size of the event.

Kirkpatrick said she would like to move toward a single rate for an admissions tax, possibly setting it lower than the current 10 percent maximum, but broadening it to cover more events.

Currently, there are many major exemptions for nongaming events. They include outdoor concerts even if there is an admission charge; NASCAR events, baseball games and boxing matches.

As a result, such events as the Electric Daisy Carnival and Burning Man are not required to assess the tax.

Sen. Mark Lipparelli, R-Las Vegas, a former chairman of the state Gaming Control Board who is drafting a bill to address concerns on the gaming side of the tax, agreed that moving to an admission tax and getting away from a system where interpretations have to be made as to what constitutes live entertainment is the way to move forward.

Contact Sean Whaley at swhaley@reviewjournal.com or 775-687-3900. Follow @seanw801 on Twitter.