Proposed tax would force major changes at brothels

Friday, June 27, 2003 | 11:47 a.m.

CARSON CITY -- The 10 percent live entertainment tax, now being considered by the Legislature, would change the way houses of prostitution do business.

George Flint, lobbyist for the brothel industry in Nevada, said today that the tax, if enacted, should produce $2.5 million a year from the bordello industry. The industry welcomes the chance to contribute to the state coffers because "this will give us a legitimacy as an industry that we have never enjoyed," he said.

Currently brothel customers do not pay an entrance fee and only pay for the services of prostitutes.

Flint said that will change. There will be no admission charge to the bordello. But once the customer goes into a bedroom, there will be a $20 or $40 admission fee, depending on the business.

Brothel owners will pay the 10 percent on the collection of that amount. And the $20 or $40 fee will be deducted from the amount charged for the services rendered by the prostitute.

There are nine major bordellos in rural Nevada and 18-29 "mom-and-pop" businesses, said Flint. He estimated there were 600,000 customer visits to bordellos last year.

In addition, he said the bordellos would charge an extra 50 cents a drink to cover the increase in the liquor tax which is going up anywhere from 79 to 89 percent. And the cost of souvenirs, such as T-shirts, will also rise, probably by $1, he said.

As currently designed, the entertainment tax would go into effect Jan. 1.

Flint sees this tax as giving the industry protection in the future. As long as it keeps its nose clean, he said, "it will be a cold day in hell before some crank comes in and tries to get us outlawed."

Until now, the revenue from the industry has gone mainly to local governments.

If the taxes from the drinks and the souvenirs are added on, that should amount to $4 million to $5 million a year in tax payments from brothels to the state. He said he did not think lawmakers would want to give up that revenue in the future.

"The implementation of the tax gives us an insurance policy our industry has never before enjoyed," he said.

And he said this might spark other states to consider allowing these businesses.

The houses, he said, will post signs informing customers of the change in policy and the law of the state imposing the taxes on live entertainment and liquor sales.

In the men's clubs and topless places, Flint noted, the tax would not be imposed on lap dances done for customers by the women.

The state Department of Taxation, in working out the regulations, will still have to approve the final guidelines for this tax, he said.