Nearly all Nevada's brothels exempt from paying new tax

CARSON CITY, Nev. (AP) -- Most Nevada brothels will be exempted from paying a new tax on live entertainment approved last month as part of a record $836 million Nevada tax plan -- and some lawmakers are surprised.

"I thought we included brothels," Senate Minority Leader Dina Titus, D-Las Vegas, told the Las Vegas Review-Journal. "It was one of the unintended consequences when we changed the bill."

Assemblywoman Chris Giunchigliani, D-Las Vegas, also thought brothels were included.

"We may have unintentionally left them out," she said. "We were trying to tax strip clubs that never have paid a dime. That was a big win for us. We will have to pick up brothels next time."

At a special session last month, legislators amended a bill to exempt entertainment associated with bars with 300 or fewer seats from the 10 percent live entertainment tax.

The change was made after Sen. Joe Neal, D-North Las Vegas, complained the tax would hurt small neighborhood bars that sometimes offer bands to entertain customers.

George Flint, executive director of the Nevada Brothel Association, said the change frees all but two or three of Nevada's 26 legal brothels from paying the tax.

Each brothel has a bar that doubles as a waiting room for customers. In calculating seats in brothels, Flint said he counted the number of seats in the brothel bar, along with the number of bedrooms.

Assemblywoman Sheila Leslie, D-Reno, said she was aware that the 300-seat exemption would free most brothels from the tax.

"It was a choice between taxing the strip clubs in Vegas or the brothels," she said. Strip clubs will be subject to the tax when it goes into effect Jan. 1.

Leslie praised Flint and the brothel association for their willingness to accept a tax.

She pledged to work with Flint on a brothel tax that can be adopted at the next Legislature in 2005.

During the legislative session, Flint pledged brothels' support for a share of the state tax burden. He estimated they would contribute $2 million a year.

He said removal of brothels from the live entertainment tax was a mistake that he wishes could be corrected in hearings this week before the state Tax Commission.

"I don't believe it was the intent of the Legislature to take us out," he said.

With more acceptance of the industry, Flint hopes lawmakers remove a ban on advertising by brothels.

Prostitution is legal in 12 of Nevada's 17 counties, but is illegal in Reno and Las Vegas.