Brothel lobbyist says new tax could help his industry

Kirsten Searer and Cy Ryan

Thursday, April 14, 2005 | 9:36 a.m.

CARSON CITY -- Brothels could pay an extra $2 tax on each customer under Assembly Bill 317, heard Wednesday by the Assembly Commerce and Labor Committee.

George Flint, lobbyist for the Nevada Brothel Owners Association, said brothel owners hoped to be taxed under the live entertainment tax imposed by the Legislature in 2003.

But a last-minute technical issue excluded brothels from the tax, said Assemblywoman Sheila Leslie, D-Reno, who is sponsoring the bill.

Flint wants to create a $20 admission fee, and tax 10 percent of the fee. The rest would go to the prostitute.

The bill would also create a 10 percent entertainment tax on food, drinks and merchandise sold on top of the 7 percent sales tax brothel customers already pay, he said.

He estimates that the new brothel tax could yield $3.2 million per biennium for the state.

While brothels pay taxes to counties, they don't pay to the state, he said.

"I think it's better to tax us and get some benefit from us rather than the other way around," he said.

Flint admitted that the industry hopes the tax will help protect brothels because it would create a revenue stream legislators wouldn't want to loose.

"Candidly, I think it will give us some added acceptability," he said.

The committee did not vote on the bill Wednesday.

At least one bordello owner, however, disagrees with the tax.

Dennis Hof, who owns two brothels in Lyon County, said he already pays $200,000 a year in license fees and says a tax on services by the prostitutes, merchandise, drinks and food, would mean less spending by the customers.

Hof, owner of the Moonlight Bunny Ranch and Bunny Ranch II, is not a member of the brothel association.

Hof said if the state needs more money, get it from the $200,000 a year he pays Lyon County. "I can't pay any more," he said.

His employees also get the customers to make donations that go to such things as the Children's Museum, an animal shelter or for other charitable organizations.

The 10 percent proposed tax might mean $40,000 to $50,000 a year from his business.

"None of it will come back to Mound House," the site of his brothels, about 10 miles east of Carson City.

Flint said Wednesday that if Hof doesn't like the tax, he may end up down the road in two or four years with a tax that is "really punitive."

Hof suggested that Flint and his organization are trying to bring "legitimacy" with the tax.

"My business has been legitimate since 1972," he said, noting that houses of prostitution are approved by rural counties that want them. The bordello operator said he pays 83 percent of the business license tax collected in Lyon County.

But Hof would favor a trade-off. At present, he said the state prohibits him from advertising on television, newspapers and billboards. The tax would make sense if the advertising ban was lifted, he said.

The Senate Taxation Committee was expected to consider a bill taxing brothels, Senate Bill 247, today at its work session.