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September 20, 2014

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Burning Man festival sells out, but state loses out on tax revenue

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Las Vegas Sun File

A man takes a break from learning how to walk on stilts at Burning Man.

Burning Man video explainer 2007

This year's festival featured approximately 47,000 people from Las Vegas, the U.S. and the world, who all traveled to an ancient lakebed, known as "the playa" in the Northern Nevada Black Rock desert to build a temporary, all-encompassing community defined more by its spirit, art, and gifting than the normal constraints of daily life.

Electric Playa

There is plenty of partying during the daytime hours of the six-day radical self-expressive event known as Burning Man — held annually in Nevada's Black Rock Desert. But the pulse picks up even more when the sun goes down on the barren playa, as nearly 50,000 burners really start to play.

Click to enlarge photo

In the midst of a white-out dust storm, Burners visit "Crude Awakening", a multi-artist structure at Burning Man in 2007.

When Burning Man organizers abruptly closed ticket sales this week, they created an instant black market for tickets to the counterculture celebration that draws 50,000 people to the Black Rock Desert north of Reno each Labor Day weekend.

Some prices last week shot as high as $25,000 for a single ticket with a face value of $360.

But don’t expect the state to get a cut of the ticket revenue — even from legitimate ticket sales.

Because it’s considered an art festival, the week-long participatory event that culminates in the conflagration of a towering wooden structure in the shape of a man, isn’t subject to the state’s live entertainment tax.

It’s not the only massive Nevada festival that doesn’t have to fork over live entertainment dollars to the state.

The Electric Daisy Carnival that drew, by some estimates, 230,000 people to listen to three days of dance music didn’t have to pay it either.

Why? The performances were held in outdoor venues.

“We looked into it before the event was held,” said Chris Nielsen, interim director of the Nevada Taxation Department. “There is a specific exemption for concerts held outdoors.”

Since it was created in 2003, the live entertainment tax — 10 percent for smaller venues and 5 percent for larger ones — has been the subject of wrangling.

Does it, for instance, apply to the wandering violinist who serenades you while you dine at a fancy restaurant? After much debate the answer was ultimately no.

Does it apply to baseball tickets? Again, no.

What about NASCAR? Nope, another special exemption.

But the exemptions are letting significant revenue slip the state’s grasp at a time when it’s hurting for money.

If the 5 percent tax was assessed on the estimated 50,000 tickets sold for Burning Man, it would have generated nearly $1 million. This was the first year Burning Man tickets “sold out.” Organizers had to stop sales to stay under the 50,000-person limit imposed by the Bureau of Land Management.

The Electric Daisy Carnival had a two-tiered ticket price. But on the low end of the estimate, a 5 percent tax assessed on 230,000 of the cheapest tickets would have generated $1.15 million for the state.

Neither event asked for the exemption. The art festival designation was fought for by the Reno Artown event. And the outdoor concerts exemption was in place long before Electric Daisy even considered moving to Las Vegas.

But some lawmakers are saying those exemptions should be revisited.

“Sometimes they are proper at the time, but we don’t leave room to at least make adjustments for new events coming in,” said Assemblywoman Marilyn Kirkpatrick, D-North Las Vegas, chairwoman of the Assembly Taxation Committee. “I mean, who would have ever thought we’d have a rave that was that huge? I don’t think something like that was even taken into consideration.”

No one disputes that the massive events generate significant economic impact outside of the live entertainment tax. Electric Daisy Carnival patrons packed hotel rooms and crowded downtown Las Vegas.

Burning Man organizers estimate they spend $5 million a year in Nevada, planning and producing the event. Burning Man participants spend heavily on supplies, car rentals and rooms, generating an estimated $15 million for the Northern Nevada economy.

“Burning Man has a huge economic impact footprint in this town,” said Assemblyman David Bobzien, D-Reno.

He said the Legislature should look at the big picture instead of nit-picking the many exemptions.

“We really need to stay focused on the broader based tax reform,” he said.

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  1. They use the Public's infrastructure, they need to pay for that use. All the rest of it is typical free market bs about generating blah blah, all impossible without the use of public infrastructure.

    There is no debate, CHARGE them. The exact same way they CHARGE their stupid attendees up the gazoo.

    I cannot believe NASCAR gets off for free, come-on.

  2. wow, a politician who actually has a brain and can see the BIG picture! Thank you, Assemblyman David Bobzien

  3. While no one likes to pay taxes, it is incompetence on the part of government officials not to pass laws taxing these events! No wonder Nevada is broke at all levels!

  4. Stephen does not understand the concept that event goers occupy hotel rooms, thus paying hotel occupancy tax, purchase food and beverage, thus paying sales tax, and purchase gasoline, thus paying both state and federal gasoline taxes. All of these taxes support infrastructure.

  5. Nevada was not built, and is certainly not being sustained relying upon fly ointment events like a BM. Something which could be over as soon as their fans tire of the whole "being raked by the promoters" event. Course even then they will be told it was the State who forced us to rake you.

    BM was not meant to be organized, the whole point. Party is over, pay your bills. Stop welfaring off the Public. Step away from the trough pigs.

    a 15 million dollar sugar high is not sustainable development. It does not matter for a pile of beans if these people spend a dime here. There is no cycle to it. It is fluff at best. Akin to a kid buying a yo-yo at the checkout counter.

    Reno is too big for the business available there. It needs to shrink, balance. BM is no answer.

  6. You read the information on their website and BM is paying a bunch of people including several Nevada Law Enforcement agencies.http://afterburn.burningman.com/09/admin/government.html

    They pay the BLM hefty fees. The people getting stiffed are Nevada residents.

    Go read the entertainment tax for yourself..google "live entertainment tax nevada' What you will find is exemptions for BM as well as NASCAR written onto this legislation in recent years. Did Nevada Taxpayers approve these exemptions? course not.

    BM is a profit making enterprise. If they want the public's help, go non-profit.

  7. Something EVERYONE seems to be forgetting. If you put this tax on NASCAR or Burning man or any other major outdoor event the owner of the Event is not the one paying it. As with any other "tax" it is the people that go to the events that pay it.

    To many people in this state has grown attached to Tax anyone but them yet they are the ones feeding at the public trough.

    These events bring in Millions of Dollars to Nevada in many ways that pay for your way of life. No need to keep hitting them for more just because you think you can.

  8. If the state would eliminate all the waste, fraud and abuse there would be no need for any entertainment tax in the first place.

    How did Nevada ever survive without this tax prior to 2003??

  9. What is not mentioned is how many jobs were lost because of this silly tax.

    I am betting that anyone who works within the tourist corridor can each name at least 5 people they knew, who lost their job because of the LET. That tax helped the casino's shed a few jobs and replace them with canned music or change a lounge into a Starbucks

    I was hoping to see some comments from those people stung by the tax, but they all had to leave the state to find work elsewhere.

    Talk about spreading the wealth, each one of those lost jobs equals more than the lost tax on one silly concert.

    Even a Clark County School graduate (are there any?) can understand the $40 million plus impact these event have on the local economy, that we can skip at least one little tax on the people who attend.

  10. If anybody thinks the Burning Man organization isn't paying their fair share, you are sorely mistaken. They pay everything they are required to as well as donate above and beyond to the community and local tribes, paid for improvement to hwy 447, the list goes on and on, just spend a little time on google... If more Nevada businesses were as generous as Burning Man, this state would be a much better place.
    You can check out last year's burning man budget here.
    http://financials.burningman.com/chart_2...

    Anybody who has anything bad to say about the Burning Man community can go here
    http://www.burnerswithoutborders.org/pas...
    and here
    http://www.blackrocksolar.org/

  11. The Newmont Carlin mine grossed around $360 million last year and paid ZERO taxes and nearly NOTHING was said about this. The mining industry around $4 billion gross paid less than 1% of their gross receipts to Nevada last year when gold is bringing the highest price ever.

    Yet the legislature will nit pick and talk, pick a little here, pick a little there, then talk talk talk about taxing a one time show. Next they talk about taxing the brothels, then about taxing the street venders, all small dollar acts and let the huge dollar revenues go untaxed.

    A tempest in a teacup is the best description for taxing Burning man. Wall Street destroys the housing market, creates trillions of dollars in bankruptcies then the Tea Party yells about "illegal immigrants" taking our jobs. What a bunch of crap. Immigrants take the jobs that no one else wants, as they have throughout history.

    A tempest in a teacup. Nonsense. This country is incapable of making progress in any direction because it is always spinning around it's own navel in the hopes of finding it's brain.

  12. Burning Man has done a terrific job evolving and continues to do so as they have more events. They do more than their fair share in giving back.

    Nevada has an on-going problem with over a half century of "kick the can down the political road" politicians, who are remiss in serving the People and State they are elected to serve. For over 100 years, the same old TAX LAWS pertaining to MINING, CASINO, RESORTS, and other industries persist, unchanged with modern times and technology. Our LAWMAKERS have failed to actively, meaningfully, and effectively REFORM or RESTRUCTURE TAX LAWS that no longer serve us or are relevant to current times!

    This MUST change!

    SunJon pointed out, "The Newmont Carlin mine grossed around $360 million last year and paid ZERO taxes and nearly NOTHING was said about this. The mining industry around $4 billion gross paid less than 1% of their gross receipts to Nevada last year when gold is bringing the highest price ever."

    LAWMAKERS rather chip away at others, than go after those who actively CONTRIBUTE to their political campaigns or support them for reelection! And the average citizen in Nevada is struggling, trying to keep a roof over their heads, and food on their plates, rarely, if ever, get involved with contacting their political leaders. They are worn out, disempowered, and disenfranchised over what is happening in the big picture of their lives. This is killing America, and it is destroying Nevada.