The Las Vegas Business Press - Concert Tax Collections Take A Big Slide
Concert Tax Collections Take A Big Slide
BY ARNOLD M. KNIGHTLY
BUSINESS PRESS
How well, or poorly, the state's embattled live entertainment tax is performing depends on which state agency is collecting the tax. The tax is collected separately by the State Gaming Control Board and Nevada Department of Taxation, depending on whether the entertainment is in or out of a casino.
The collections from the gaming properties are experiencing double-digit growth but the non-gaming businesses are showing double-digit declines.
"I think the law, the way it is written and reformed, makes it hard for the tax commission to come up with definitions," Senate Minority Leader Dina Titus said. "It may be something that has to be revisited all together."
Entertainment taxes from casino venues like Wynn Las Vegas' Le Reve are experiencing double-digit growth.
For the fiscal year that started July 1, the Nevada Gaming Control Board has collected $37.6 million, a 14.4 percent increase over the previous year. However, the Department of Taxation's tax revenues were down 25 percent to $2.3 million.
"In all fairness, it may be down a little right now," said Darren Libonati, director of two major non-gaming venues -- the Thomas & Mack Center and the Cox Pavilion. "I still feel it is a big number regardless. With all the activity with the Strip properties and all their different venues, these taxes are being collected."
CREATIVE COUNTING
According to Titus, ignorance of the regulations, combined with some enforcement issues and creative occupancy counting may be at the root of the decline in non-gaming collections. The wording of some of the legislation may also open up the tax code for some loose interpretation by businesses making enforcement harder. Determining who judges maximum occupancy is left up to the "State Fire Marshall, or ... other local government agency."
"Originally, it was supposedly capacity set by the fire department," Titus said. "Then it got loosely translated into seats, and then a whole lot of people weren't paying."
A 2007 revisit of the live entertainment tax would be the third time the state Legislature has attempted to tackle the issue. Born from the 2003 state legislative session as part of a widely reported $833 million tax package, the live entertainment tax expanded the casino entertainment tax for gaming properties and introduced a new tax to nongaming properties.
Last July, the Legislature lowered the seating capacity for the higher tax from a maximum occupancy of 300 to 200 in a move, according to Titus, to corral businesses that were trying to lower their capacity by removing seats.
"I tried to extend the strip-club side," Titus said. "Some of the smaller clubs are trying to get out of it by taking out a number of seats so they fall under the 300 and don't have to pay."
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