Legislators wrestle with how to tax Nevada brothels

Erin Neff

Thursday, June 5, 2003 | 9:47 a.m.

CARSON CITY -- It depends on what your definition of "it" is.

The Nevada Legislature returned to TAX 101 on the first full day of the special session Wednesday with more confusion over how to tax the state's most notorious legal industry -- brothels.

"I'd certainly say they are unique because you talk about inventory -- they sell it, you buy it, and they still have it," Senate Majority Leader Bill Raggio, R-Reno, said during a meeting of his 21-member body considering taxes.

In the Assembly, the 19-member Select Committee on Education Funding and Revenue also stumbled over how brothels should be taxed.

Are the working girls at the Moonlite Bunnyranch in Lyon County offering free services to servicemen and women returning from Iraq classified as sole proprietors subject to the business license tax? Or are they entertainers?

"I personally am still in favor of taxing brothels as entertainment," Assemblywoman Sheila Leslie, D-Reno, said in an interview. "Before we had the entertainment tax I thought brothels should come under the admissions and amusement tax."

Under Senate Bill 509 -- the tax plan introduced on the last night of the regular session -- brothels would be subject to the 10 percent live entertainment tax.

George Flint, a lobbyist for the Nevada Brothel Association, actually pledged support for taxing the industry as live entertainment as a way to also put a levy on adult cabarets and outcall services.

"The outcall services in Las Vegas collectively spend about $20 million a year on advertising in the Yellow Pages," Flint told the Select Committee. "They are, excuse me Mr. Chairman, a front for illegal prostitution."

So, Assemblywoman Chris Giunchigliani, D-Las Vegas, essentially asked: why tax something legal, but not go after the illegal front?

"They claim to be exotic dancers," Flint said. "If you attempt to put this particular tax on this arena, you could run into the First Amendment."

Giunchigliani said she would rather risk "putting them in" than keeping them out.