Wynn asks Legislature to clarify art law

Wednesday, Feb. 17, 1999 | 11:49 a.m.

CARSON CITY -- The Senate Taxation Committee agreed Tuesday to introduce a bill sought by Mirage Resorts Chairman Steve Wynn to clarify the law permitting a tax exemption on his Bellagio art collection worth $300 million.

Attorney Harvey Whittemore, representing Wynn, said the bill would "resolve some misunderstandings" that have evolved since the law was passed in 1997.

After the 1997 law was enacted, the Nevada Tax Commission approved a regulation that admission to the gallery must be free to qualify for the tax break. Bellagio charges $12 a person.

"If the Legislature intended there be a period of free admission, it needs to say so," Whittemore said Tuesday.

The bill would also clarify the deadline for the art to be displayed after it is acquired. The Legislature stipulated that the art must be displayed beginning with the first full calendar year after purchase. The tax commission changed it to the first 12 months.

Mirage Resorts sued the tax commission, claiming that it had "altered the will" of the Legislature by imposing the free-admission condition and changing the time frame for the art to be displayed. The lawsuit said the Bellagio collection qualifies in all respects with state law and that the commission's action exceeds its authority.

Whittemore also said the Wynn bill would include a clause that any money made off the admission fee that is above the cost of operation and maintenance would be donated to charity.

Sen. Joe Neal, D-North Las Vegas, opposed the introduction of the bill, saying it would provide another tax break for Wynn, this time on inventory. And he suggested a court should decide on the admission fee.

But Whittemore replied that the Legislature is the right place to clear up the misunderstandings in the law, not the courts.

The 1997 law required that the art must be purchased for more than $25,000 and be valued at $25,000 or more. It also must be on public display in a public or private gallery for at least 20 hours a week for at least 35 weeks in order to qualify for the tax exemption. And it must be available for educational purposes.