Friday, July 17, 1998 | 10:47 a.m.
CARSON CITY -- It will be up to the Nevada Tax Commission at its Aug. 19 meeting in Las Vegas to decide whether casino owner Steve Wynn will be permitted or prohibited from charging a fee to his art gallery at the Bellagio hotel-casino, which opens in October.
A deadlocked developed Thursday between the state Taxation Department, an attorney for Wynn and representatives for Sen. Joe Neal, D-North Las Vegas, on the regulations for tax exemptions for fine pieces of art displayed publicly.
This was the third workshop held on the proposed regulation in hopes of reaching a consensus. But the impasse remained over a number of issues including the fee.
The 1997 Legislature enacted a law giving an exemption on the personal property tax and on the sales tax for art that was purchased for more than $25,000 and put on public display.
Wynn has purchased $285.5 million worth of art over the past 18 months and will set up a gallery at the new resort.
The taxation department has suggested the tax exemption is available only when the exhibit is free or a "nominal charge " is levied. Deputy Attorney General John Bartlett said the law was enacted to enhance education. The art should be available to as large a number of the public as possible. And high fees should not be imposed.
But Neal, a democratic candidate for governor, urged a prohibition on fees. Neal, who is recuperating from an auto accident, sent the public hearing prepared testimony which said, "... the public should not be forced to pay for Mr. Wynn's art collection twice: first with a huge tax break at the expense of school children, then again in the form of admission fees."
He said the law does not say anything about fees and the tax commission should not try to write a new law into administrative regulations.
Jeffrey Conway, Las Vegas attorney for Wynn, suggested the be no limit on the fee. "We're talking about property rights" and that can't be taken away.
Bob Ostrovsky, a member of the board of directors of the Nevada Institute of Contemporary Art, sent a letter to the hearing, backing Conway that there should not be any limitation to gain a tax exemption.
Ostrovsky said his non-profit organization depends on admissions and it would lose a valuable source of income. The cost of displaying high priced art, he said is high. These include insurance, transportation and security. "Unless these significant costs could be recovered by the imposition of a fee, organizations like NICA could not display this type of art," he said.
Andy Barbano, spokesman for Neal, called Ostrovsky "a top lobbyist for the gaming industry" and accused him of being in a conflict of interest.
Among the other disagreements was the definition of art eligible for the exemption. Conway complained under the proposed rule a Ming Vase would not qualify. Bartlett replied that would not come under the definition of sculpture or painting.
If an exemption is made for that, Bartlett said individuals would seek tax breaks for jewelry and other things. He suggested the Wynn forces go to the 1999 Legislature if it wants to open the door for further exemptions.
Neal has estimated Wynn stands to gain $15 million in tax breaks in the first year and nearly $3 million a year after that. To qualify the art must be displayed for 20 hours a week for 35 weeks in the year in which the exemption is sought.
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