More concerns about Nevada's new live entertainment tax were aired Thursday at a state Taxation Department workshop on the new levy expected to generate over $116 million in the current two-year budget cycle.
Operators of The Beach Las Vegas, a popular singles bar that's billed as "a place to party," questioned whether the tax would affect them because they have disc jockeys playing recorded music and employees who dance and toss confetti to "keep the energy level up."
Ted Quirk added that imposition of the 10 percent live entertainment levy "would be essentially fatal" to the club, and state tax officials should write the tax rules as narrowly as possible to allow for an exemption.
Quirk added that employees at The Beach aren't entertainers although they get involved in "incidental activities." The club's Internet site shows a bikini-clad woman employee mingling with patrons and bartenders running back and forth on top of a bar pouring liquor down customers' throats.
Quirk said he had "looked at every conceivable option to get out from under these definitions" in the proposed live entertainment tax rules but so far can't see how his club would be exempt.
State Sen. Randolph Townsend, R-Reno, said legislators who came up with the live entertainment tax as part of the state's record $836 million tax package didn't consider operations like The Beach.
"We did not sit down and talk about every little venue that has a strolling violinist," said Townsend, adding that the lawmakers' intent was to impose the tax on showroom acts, concerts, speedway races or other ticketed entertainment events.
Sean Higgins of ETT Inc., a slot route company that has slots at The Beach, also expressed concerns about the law, saying it appears to make his company liable for paying the taxes since it holds the actual gambling license.
"We'd cancel our contract" if that interpretation held up, added Higgins, who's also head of the Nevada Retail Gaming Association.
State Gaming Control Board Chairman Dennis Neilander questioned how the rules being adopted to collect the tax can ignore wording in the law passed this summer by state legislators. He suggested a slot route operator could have a contract with a club that would state clearly who's liable for paying such taxes.
"That works well until I'm fined by the Gaming Control Board," Higgins said.
Another Taxation Department workshop is planned Oct. 30 on the live entertainment tax. Workshops on other aspects of the tax package are planned later this month and in November.
Neilander said the Control Board also will come up with a rule change of its own. Work on that rule is planned at the board's Oct. 8 meeting. The board's parent state Gaming Commission will take up the same issue at its Oct. 23 meeting.