Regulations that will enable the state to start gathering nearly $500 million in new payroll and live entertainment taxes were endorsed Wednesday by Nevada's Legislative Commission.
The rules, the result of four months of hearings and workshops, were approved last week by the state Tax Commission and are up for additional endorsements this month by the state's casino regulators.
The regulations implement key provisions of SB8, the controversial bill designed to raise taxes by a record $833 million during the 2-year budget cycle that opened July 1. Increases in cigarette, real estate, liquor and other taxes were implemented earlier.
The payroll tax is expected to bring in about $360 million in new state revenues. Most businesses will pay a 0.7 percent levy on payrolls, while financial institutions will pay at a 2 percent rate.
The 10 percent live entertainment tax goes beyond an old tax collected only on entertainment offered in casinos. Now it applies to facilities with more than 300 seats, and will be collected on admission charges, drinks, food and merchandise sold in strip clubs, bars and many nightclubs.
The levy, which exempts casino dolphin exhibits, karaoke bars, strolling musicians, hula dancers and nightclubs with dance floors, should bring in more than $110 million over two years.
"It certainly reflects what our intentions were," Sen. Dina Titus, D-Las Vegas, said of the regulations and exemptions. She added expansion of the entertainment tax stemmed from her efforts to make sure strip clubs in Las Vegas start paying some taxes to the state.
"I wanted to get at ... the so-called gentlemen's clubs that have sprung up like mushrooms across this (Las Vegas) valley," she said.
"To have them included in the entertainment tax is a good thing," Titus added. "Their contributions to our community are dubious at best."
Chuck Chinnock, head of the state Taxation Department, expects about 50,000 businesses will pay the payroll taxes and about 5,000 will be subject to the live entertainment levies.
Both Chinnock and Dennis Neilander, state Gaming Control Board chairman, also have said business owners can write them for opinions on whether they must pay the taxes.