Conventions fail to get tax break

Tuesday, Feb. 3, 2004 | 11:03 a.m.

CARSON CITY -- Convention officials from Las Vegas and Reno lost their bid Monday to gain tax exemptions for merchants who sell their wares at convention centers.

The state Tax Commission split 3-3 on a motion to amend a proposed regulation exempting these businesses from paying the $100-a-year tax, even though they may come into Nevada for only a few days each year.

Lynn Thompson, general manager of the Reno-Sparks Convention Center, said after the vote that 30 percent of the revenue received by the center comes from public craft and trade shows, where pottery, clocks and other goods are sold.

Luke Puschnig, attorney for the Las Vegas Convention and Visitors Authority, said the $100 fee will drive away merchants who lease space in the convention center. Puschnig proposed a change to the annual business registration fee that would exempt these merchants from paying the annual tax.

Harry Slate, who helps stage consumer shows in Southern Nevada, said "These vendors are the lifeblood of our business." He said there would be a "tremendous burden" on exhibitors if they have to pay $100 a year to come to display and sell their goods in Nevada.

Representatives of Henderson testified that the $100 fee would hurt exhibitors at the large annual craft show in that city.

But Barbara Smith Campbell, chairwoman of the tax commission, said the idea of the Las Vegas Convention and Visitors Authority would exempt all merchants who put on shows. The suggestion would exempt such things as the home and gun shows.

"And it may create an exemption for out-of-state exhibitors," she said.

Commissioner Tom Sheets of Las Vegas said he was comfortable with the suggestion of the convention authority.

Commissioner David Turner of Reno said: "We've got a convention authority and we've got to support it. If we're driving business out I've got a real problem with that."

Sheets, Turner and Hank Vogler of Ely voted in favor of the convention authority's proposal. Smith Campbell and Joan Lambert, both of Reno, and John Marvel of Elko opposed it. The plan lost on the tie vote. Commissioner Robert Barengo of Reno was absent.

Marvel said however that the regulation could be amended in the future.

Carole Vilardo, executive director of the Nevada Taxpayers Association, told the commission there was an ambiguity in the law and any ruling should be decided in favor of the taxpayer. She said there would be some revenue lost but this could be cleared up at the 2005 Legislature.

She suggested the enforcement would be difficult because the state Taxation Department would also have to police the craft and trade businesses in hotels such as those "selling Hong Kong suits."

Nobody knows how much revenue will be collected from these merchants.

Sen. Randolph Townsend, R-Reno, who played a major role in putting together the $833 million tax package last year, said some of these issues were overlooked at the end of the session.

The proposed regulation, without the amendment of the convention authority, has been cleared as complying with the law by Legislative Counsel Brenda Erdoes. The regulation still needs to be approved by the Legislative Commission headed by Townsend. He said the commission would defer to the decision of Erdoes.

"We can't go against our own legislative counsel," Townsend told the commission.

On a related issue, the commission voted 4-2 to protect Nevadans who do business out of their home and earn less than $22,000 a year. They are exempted from paying the $100 fee.