Looking for new vices to tax, Nevada lawmakers have turned their sights on escort services and massive music-and-light festivals in the desert.
Lawmakers this week eliminated loopholes in Nevada’s live-entertainment tax, a lounge-lizard levy that had covered cabaret performances and burlesque dancing. It now includes a 9 percent charge on tickets for events such as Burning Man, a free-form art encampment, and the Electric Daisy Carnival, a three-day music and light show in Las Vegas that attracts 400,000 people.
Both feature youthful masses in fanciful outfits, some carrying a plentiful supply of psychoactive drugs despite organizers’ warnings, and all bearing taxable entertainment dollars.
“There’s no better venue in the world than Southern Nevada to conduct an event like Electric Daisy Carnival and there’s no better place than the desert of Northern Nevada for an event like Burning Man,” said state Senator Mark Lipparelli, a Las Vegas Republican who sponsored the bill. “We like them as businesses and we want them to keep coming here. We also want to improve education in Nevada.”
The tax on the tickets, which can cost $400, also would apply to “pickup fees” for escort services, but not prostitutes at Nevada’s 24 legal brothels.
The old tax, with roots in Las Vegas’ cabaret culture of the 1960s, the heyday of the Rat Pack and Louis Prima, generated about 4.3 percent of Nevada’s $6.3 billion two-year budget. State analysts haven’t calculated the expected yield from the new tax, but Lipparelli said it will be similar to the previous figure.
Along with the entertainment tax, lawmakers approved Governor Brian Sandoval’s $1.1 billion package of new and extended taxes on businesses, cigarettes, payroll and sales.
Promoters of Burning Man and Electric Daisy Carnival, both of which originated in California, weren’t celebrating.
Burning Man features massive installations -- many of them mobile -- fanciful costumes and copious nudity. After days in which an impromptu culture is created, the festival climaxes with the immolation of a massive effigy.
“Burning Man participants contribute more than $40 million annually to the Nevada economy; they pay their fair share of sales and gas taxes, and they are tremendously supportive of local businesses,” Jim Graham, a spokesman for the nonprofit Burning Man Project, said by e-mail. “To single out a nonprofit for an estimated $2.8 million tax bill is short-sighted.”
Electric Daisy has generated more than $1 billion for the Southern Nevada economy since it came to Las Vegas in 2011, said Insomniac spokeswoman Jennifer Forkish.
“It’s been a very attractive place to produce music festivals, but this new law is extremely detrimental to our industry, one that generates hundreds of millions of dollars in revenue for local and state governments while operating on razor-thin margins in an already high-risk environment,” Forkish said in an e-mailed statement.