Friday, Oct. 31, 2003 | 9:52 a.m.
CARSON CITY -- The Beach nightclub in Las Vegas may have hit on a way to avoid the new 10 percent live entertainment tax that becomes effective in January.
Ted Quirk, co-owner of the Beach, outlined a proposal Thursday that would exempt his club and other similar operations from the tax.
Quirk told a hearing of state tax and gaming regulators that he would go out of business if the tax was imposed on his business. His bartenders and waitresses sometimes do such things as dance on the bar, blow confetti on the customers or break out in song.
"This is essential for the success of our business," Quirk said. "It's a high-energy business."
Under the language of proposed regulations being considered by the state Tax Commission and the Nevada Gaming Commission, the activities in The Beach would be considered live entertainment.
Quirk suggested adding a sentence to the proposed regulations that would say activities by service employees whose primary responsibility is serving food, refreshments or merchandise should not be considered live entertainment if those activities are infrequent and nonfeatured.
Peter Bernhard, chairman of the Gaming Commission, said he liked that definition.
Bruce Aguilera, representing the Golden Nugget, also sought an exemption for the hotel's Italian restaurant where waiters periodically interrupt service to break into an aria.
The Gaming Commission will adopt its live entertainment tax regulation for casinos at its Dec. 18 meeting and the Tax Commission will consider a final regulation at its meeting late in November.
Barbara Campbell, chairwoman of the Tax Commission, said the goal of the Legislature, in part, was to tax the so-called topless and nude dancing clubs. She wondered if the language suggested by Quirk might result in a tax break for these businesses.
But Quirk said those clubs hire professionals to entertain, as opposed to his bartenders and waitresses who are not paid extra.
Kami Keshmiri, representing the Wild Orchid, a strip club in Reno, wondered if he would have to pay the 10 percent tax because of his capacity.
The Wild Orchid charges a cover charge to enter but it has seats for 180 to 190 patrons. But he said there are other rooms where a female entertainer can dance for customers for an extra fee. Couches are in those rooms for customers, but it is not general seating, Keshmiri said. He wondered if these areas should be counted. He also wondered how many inches on each sofa would translate into a seat.
The law says businesses with a seating capacities of less than 300 each are exempt from the live entertainment tax. But it says maximum seating capacity is determined by the state fire marshal or the local government that has the authority to determine the maximum occupancy of the business.
So, Campbell told Keshmiri, if the fire marshal decides the capacity of the club is more than 300, the tax must be paid.
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