Bellagio tax break plan moves forward

Wednesday, April 26, 2000 | 10:52 a.m.

CARSON CITY -- A proposed state regulation allowing tax breaks to the Bellagio hotel-casino in Las Vegas for displaying a fine arts collection is moving forward, but there is still a $5.5 million unanswered question.

The issue will be placed before the Nevada Tax Commission, probably at its August meeting, says Dino DiCianno, deputy director of the state Department of Taxation.

The 1997 Legislature passed and then amended in 1999 a law permitting a property and sales tax break to the Bellagio and Mirage Resorts Chairman Steve Wynn, who leases part of his art collection to the hotel-casino for $5.5 million a year. The hotel-casino also displays its own paintings.

The state regulation, as now written, allows the Bellagio to deduct the $5.5 million a year from its admission collections of an estimated $7 million last year. The law says the remaining net revenue should either be paid in taxes or donated to charity.

Alfredo Alonso, a lobbyist for Mirage Resorts, said the law contemplated allowing the hotel-casino to deduct the rent of the art from its revenue. This deduction, he said, does not go to Wynn, who leases the art. In fact, Alonso said there would be some tax liability on Wynn for receiving the $5.5 million in lease payments.

The regulation also permits the Bellagio to deduct other expenses such maintenance, salaries of the gallery workers and insurance.

DiCianno said attorneys for the taxation department, speaking at a workshop Tuesday, felt it was "questionable" that the hotel-casino qualifies to deduct the $5.5 million from its revenues.

"We would like to have a discussion in front of the Tax Commission," DiCianno said.