New Nevada Sales Tax Laws on Live Entertainment
- Sales Tax
- November 30, 2015 | Stephanie Faris
Nevada has long been known for its casinos and shows, drawing tourists from around the world. In addition to the many travelers who visit for pleasure, businesses also routinely hold conferences and conventions in the town known as “Sin City,” despite the many distractions.
As part of a tax restructuring effort, state legislators have amended the Live Entertainment Tax, which may affect upcoming conferences and other events in the city. Event planners who are considering hosting an event in Las Vegas or anywhere else in Nevada may want to pay particular attention to the changes in sales tax laws.
The Previous System
Until the change, Nevada laws based sales tax amounts on the occupancy limits of an event venue. If occupancy was 7,500 or below, event hosts were required to pay 10 percent on admission, food, and merchandise. That amount dropped to 5 percent if the occupancy limit was higher than 7,500.
There were numerous exceptions to the entertainment tax under the previous system, including NASCAR races and outdoor concerts, both of which will now be taxed. Nonprofit organizations will remain exempt as long as ticket sales remain at 7,500 or below. If more tickets are sold, the organization will be required to pay sales tax.
The New Law
Under the new law, sales tax must be charged at a flat rate of 9 percent regardless of occupancy limits. The goal was to simplify the process but at the same time, event hosts will be required by law to keep more detailed records. To prove that tax was charged correctly for each event, casinos and venues may be required to present credit card billing information.
The new law applies to events where admission is charged and entertainment is provided. There are a few confusing areas of the law, especially surrounding separate services provided at the same event. General admissions are subject to the tax, but separate table fees aren’t taxed, according to Nevada Gaming Control Board’s Shirley Springer.
Tourism and Business
Under the new law, if a venue doesn't charge admission, it doesn’t have to collect tax. This has been a source of controversy among Las Vegas business owners, who feel that it gives an unfair advantage to large casinos that bring in entertainment. The definition of “live entertainment” is spelled out explicitly in the legislation, with a detailed list of events that are subject to the tax.
Businesses that plan events in the area will need to pay attention to the section of the new law that refers to “casual assemblage.” If the purpose of the event is not primarily entertainment, the imposed tax does not apply on any live entertainment that is brought in. However, if products are sold at a convention, conference, or trade show, businesses will still be responsible for paying state and local sales taxes on those sales using a one-time sales tax return. In Las Vegas, the sales tax rate is 8.1 percent on purchases.
The recent changes in sales tax laws in Nevada can be complicated for both local businesses and event hosts in the area. However, for the most part the new law makes things easier by setting a 9 percent flat rate for most events. For more detailed information on what is and isn’t included in the entertainment tax, Nevada’s Department of Taxation has created this FAQ page with common questions.