January 17, 2022

Volume XII, Number 17

Advertisement
Advertisement

January 15, 2022

Subscribe to Latest Legal News and Analysis

January 14, 2022

Subscribe to Latest Legal News and Analysis

Service Charges - Updates to Nevada’s Live Entertainment Tax Part 3

“Service Charges”

Perhaps the biggest area of remaining debate is whether or not associated fees or “service charges” are to be included in the LET. The traditional payment of credit card or debit card fees to a financial institution that are unreturned to the venue remain clearly exempt under the revised law.

There is lively debate, however, on the definition of the term “service charge” and what additional “service charges” should and should not be included in the tax.

Senator Lipparelli, who sponsored the LET legislation (Senate Bill 266) in the Nevada Legislature, specifically stated in his testimony on April 7, 2015, in the Senate Committee on Revenue and Economic Development, that SB266 would add clarity to the “service charge” issue and that “service charges associated with the issuance of the ticket – to the extent that you hire someone to issue the tickets – have to be true charges paid out and not returned in any fashion.” This language suggest that Ticketmaster fees and other similar charges by third parties who sell and issue tickets would not be included in the LET, so long as the third-party vendor does not remit these charges back to the venue.

The current Board draft regulations, however, do not adopt the language that was suggested to clarify this issue in SB266. Instead, the draft continues to have language that may be unclear and, in fact, deletes the “service charge” exception to the LET that had previously been found in NRS 368A.

In the Board’s LET workshop on July 23, it was clear that there is ongoing disagreement on what should and should not be included in the LET as a “service charge.” Taxpayers argued that service charges by Ticketmaster or other third parties should be not taxed as part of the LET when that service charge is not remitted to the venue. They also argued that charges for additional services or amenities, such as special event parking or shuttles to the venue, should not be included in the LET, so long as those charges and services are optional and not required for admission to the venue.

The Board responded that “if the legislature wanted to keep the status quo [of not including such service charges in the LET], why would they delete the service charge exception?” They also commented that they do not want to risk operators “saying that the ticket price is $50 but $48 of this is for parking and only $2 is for admission.”

Several taxpayers objected to this and are submitting comments and proposals to amend the language to make it clear that what is being taxed is the admission to the facility, which should not include charges for other purposes, such as convenience fees for purchasing tickets online or having them shipped to the customer.

At this time, there is not another public LET workshop scheduled. The stated goal of the Board is to revise the regulations based on the hearings and any additional written comments they have received and to provide the revised draft for review by the Nevada Gaming Commission and then the Nevada Legislative Counsel Bureau, with the intent to have the new regulations promulgated by October 1, 2015.

The new law makes it clear that noncompliance with the collection and payment of the LET can be considered by the Board to be an unsuitable method of operation by a gaming licensee. The new law also provides for taxpayers to request an advisory opinion from the Board concerning matters relating to the LET.

The effective date of the law is October 1, 2015. The Board recently published a notice to explain how this will affect LET payments. This notice provides that if a taxpayer reports admission ticket sales on an accrual basis (i.e., advanced admission sales are reported in the month of the show/event rather than the month the sales occurred), it must report these sales on its September 2015 tax return or on an earlier month’s tax return. All admission charges reported beginning October 1, 2015, will be subject to the new 9% tax rate.

This is the final post in a series of blog posts about changes to Nevada’s Live Entertainment Tax.

Click here to read part one.

Click here to read part two.

© Copyright 2022 Dickinson Wright PLLCNational Law Review, Volume V, Number 237
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement

About this Author

Jennifer J. Gaynor, Dickinson Wright, Carson City, Gaming Attorney
Member

Jennifer Gaynor represents clients before the Nevada Legislature in Carson City, Nevada. She also practices before various professional and licensing boards and state and local tax authorities, and represents clients on matters involving First Amendment law, public records and open meeting law, gaming law and regulatory agency actions.

Professional Involvement

  • Nevada State Chair, CARE

  • Board Member, Nevada Preservation Foundation

  • Member,...

702-550-4462
Gregory R. Gemignani, Dickinson Wright, Intellectual Property Lawyer
Member

Greg Gemignani's practice focuses primarily on intellectual property law, gaming law, technology law, internet law, online gaming law, and online promotions law. He has represented many clients ranging from the largest casino companies to start-up internet ventures.

Professional Involvement

  • Member, International Masters of Gaming Law

  • Member, International Association of Gaming Advisors

  • Member, Technology Business Alliance of Nevada

    ...
702-550-4468
Kate C. Lowenhar-Fisher, Dickinson Wright, Las Vegas, Gaming Lawyer
Member

Ms. Lowenhar-Fisher is a leading Nevada gaming attorney who counsels many of the world’s premier gaming companies on regulatory issues in connection with mergers and acquisitions, corporate restructuring, reorganizations and financings.  She has extensive experience advising clients on issues related to Internet gaming, social gaming, fantasy sports, liquor licensing, sweepstakes, contests, and promotions. She regularly represents individuals and businesses before regulatory agencies, including the Nevada State Gaming Control Board, the Nevada Gaming Commission, the...

702-550-4459
Jeffrey A. Silver, Dickinson Wright, Gaming regulatory Attorney, Nevada
Of Counsel

Mr. Silver's practice focuses on every aspect of gaming, liquor licensing and regulatory law, as well as planning and zoning matters, contractor licensing and transportation law.

Mr. Silver’s representative clients include Gaming Laboratories International, Dubai World, Mohegan Tribal Gaming Authority, Tuscany Hotel & Casino, Riverside Resort (Laughlin, NV), The Stephen Siegel Group, Grand Sierra Hotel & Casino (Reno, NV), Century Gaming Technologies, Applebee’s Restaurants, Bell Transportation, United Coin, Ryan's Express, and Casino...

702-382-1661
Advertisement
Advertisement
Advertisement