Tuesday, May 17, 2005
Copyright © Las Vegas Review-Journal

Live entertainment tax revisited

Constitutionality of bill questioned

Assemblywoman Barbara Buckley, D-Las Vegas, listens Monday to a proposal that would impose a 10 percent tax on strip clubs and other venues offering adult entertainment. Photo by CATHLEEN ALLISON/THE ASSOCIATED PRESS

CARSON CITY -- A Senate-approved bill to create a special live entertainment tax for strip clubs was referred to the Assembly Ways and Means Committee on Monday, despite its constitutionality being questioned.

Majority Leader Barbara Buckley, D-Las Vegas, said Senate Bill 247 in its current state sends up a "red flag for the courts" to declare it unconstitutional. "If ... it just applies to adult entertainment it may be found unconstitutional," said Buckley, a lawyer and chairwoman of the Assembly Commerce and Labor Committee.

American Civil Liberties Union lawyer Allen Lichtenstein argued strip tease dancing is a constitutionally protected form of expression and any attempt to single it out would be found unconstitutional.

But Senate Minority Leader Dina Titus said during an Assembly Commerce and Labor Committee hearing that strip clubs are not paying their fair share of taxes and the Legislature should risk a court challenge.

"You can make the argument that it is a special kind of business that poses special problems," said Titus, D-Las Vegas. "If they want to challenge it in front of an elected court, that's fine."

Referring a bill to the Ways and Means Committee often is a convenient way for Assembly members to let bills die.

Buckley, however, said the Ways and Means Committee is considering another live entertainment tax bill and the two proposals might be combined into a single measure.

Titus' bill revamps the live entertainment tax law approved two years ago by the Legislature. Strip clubs pay about $6 million a year in taxes under that law, although legislators had anticipated it would generate $75 million.

"This is about fixing a problem, not about getting credit," Titus said of Buckley's proposals to alter the measure. "I don't play those games. It's a disservice to the taxpayers of Nevada when the Assembly does."

Under current law, most businesses, including strip clubs, pay a 10 percent live entertainment tax. But businesses with fewer than 300 seats are exempt.

This exemption, according to Titus, freed most strip clubs from paying the tax. Her bill takes out the seating exemption.

Titus also noted that the current tax law caused problems for piano players, musicians in local bars and restaurants. Her bill would free these types of businesses from the tax, along with sporting events and car races at the Las Vegas Motor Speedway.

The new tax, called an adult entertainment tax, would apply only to strip clubs.