'Poor man's tax exemption' proposed to aid Nevada artists

CARSON CITY -- While Steve Wynn and Mirage Resorts Inc. are receiving a tax break on the purchase of $278 million worth of art, now a state senator is proposing to extend the favor to the little guy.

Sen. Ernie Adler, D-Carson City, has asked that a bill be prepared for the 1999 Legislature for "the poor man's tax exemption for artists."

It would exempt paying part of the sales tax on the sale of paintings by Nevada artists that sold for more than $250.

The aim is "to develop more Nevada artists who sell paintings and sculpture and get artists to consider relocating to Nevada," Adler said. "We're trying to develop more of an art community."

The 1997 Legislature enacted a law to permit a break on the sales and personal property taxes for those who purchase art for more than $25,000 and then display it publicly.

Buyers get a one-time break of paying only 2 percent instead of 7 percent on the sales tax at the time of purchase. And they receive a yearly personal property tax exemption equal to 1 percent of the value of the art.

Sen. Joe Neal, D-North Las Vegas, a Democratic candidate for governor, has complained Mirage Resorts will receive a $15 million tax break the first year and up to $3 million annually after that.

The art will be on display at the Bellagio, which is scheduled to open Oct. 15.

Under Adler's proposal, the state Department of Taxation would certify an artist as a Nevada resident and the advantage would not be available to painters from out of state. A sticker would be issued to the Nevada artist and it would be placed on his work, signaling the tax exemption as painting was up for sale by a dealer or a gallery.

While Adler wants to extend the tax advantage for art, Neal wants to repeal the benefit given Mirage Resorts and others who buy masterpieces.

Meanwhile the state Taxation Department has set a workshop for July 16 in Carson City to hammer out language on a proposed regulation for the sales tax art exemption. Dino DiCianno, deputy executive director of the department, said, "It is our intention to develop a consensus of the parties and take that version to the Nevada Tax Commission for final adoption."

The proposed regulation was up for final approval by the tax commission before but representatives of the Mirage suggested changes in the language. So the commission granted a delay to give everybody a chance to study the suggested changes.

Neal has objected to a portion of the regulation which allows those who exhibit the art to charge a fee. He is suggesting that Nevadans pay only one cent to view the art since residents are paying for the exemption.

To qualify for the exemption the art must be on display for 30 hours a week for 35 weeks a year.

Included in the artwork purchased by Wynn and Mirage Resorts are paintings by Van Gogh, Monet, Cezanne, Picasso and Renoir. Some of it will be displayed in a gallery at the Mirage which will charge an admission. But other paintings will be in one of the restaurants.

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