Nightclub owner: Tax could ruin his business

Friday, Oct. 3, 2003 | 11:22 a.m.

CARSON CITY -- A co-owner of the popular nightclub "The Beach" in Las Vegas says the state's proposed 10 percent live-entertainment tax could put it out of business if it applies to disc jockeys, bartenders or cocktail waitresses who also entertain.

"This proposed tax would be fatal," local attorney Ted Quirk, a Beach co-owner, told a meeting of state taxation officials Thursday.

He urged those writing the regulations to define the law narrowly so the live-entertainment tax would not be imposed where disc jockeys play records. He said the tax should not be levied on a place where employees such as cocktail waitresses or bartenders jump on the bar and dance or throw confetti on customers.

The state Tax Commission, the Nevada Gaming Control Board and the Nevada Gaming Commission worked Thursday on proposed regulations for how the tax will be applied Jan. 1.

The officials also received a letter from Nevada Resort Association president Bill Bible, that said there was nothing in the law that allowed the tax to be imposed in a place that features dancing. Places that uses disc jockeys should not be taxed unless the DJs are well known enough that their name draws customers, Bible wrote.

The regulations "would best be rewritten to eliminate from taxation a participatory entertainment activity such as 'dancing' and provide that a disc jockey, playing recorded music, becomes a triggering event for taxation purposes only if the disc jockey's notoriety and fame create an attraction that draws patrons," he wrote.

The regulation proposed by the Taxation Department said the entertainment tax would not apply to a business where the disc jockey presented recorded music. But the tax would apply if the disc jockey used a microphone and performed stunts, dances, pantomimes or similar forms of visual entertainment.

Nevada Gaming Commission chairman Dennis Neilander said the casino entertainment tax now is charged in casino nightclubs where a disc jockey works.

Quirk said his nightclub, which does not pay that casino entertainment tax, has been voted in a newspaper poll as the "Best Singles Bar in Las Vegas" and he features a disc jockey with live dancing. He said he charges the $10 admission only to single men from out of town, who make up about one-quarter of his customers. Women and locals are admitted free of charge, he said.

"We've put our prices to the limit," Quirk said.

The law says that the 10 percent tax must be charged on admission and on food and drinks on establishments that pay it.

The tax would not apply if "ambient background music" was provided at such places as restaurants "so long as the music or song does not routinely rise to a volume that interferes with casual conversation or encourages patrons to watch rather than simply listen."

The proposed regulation said live entertainment would include such things as concerts, ballets, dance productions, an acrobatic or stunt productions, animal show, athletic contests and a cooking or product demonstration.

Exempted from the admission's tax, under the proposed regulation would be a farmer's market, flea market, swap meet, home show, recreational show, consumer show, food or beverage tasting, ethnic festival, art, craft or artisan's fair, professional conference or similar event.