Nevada revenue staff review Live Entertainment Tax history, exemptions and policy options including resale and sports carve-outs

Fiscal staff told the Joint Interim Standing Committee on Revenue that Nevada's Live Entertainment Tax (LET) is a hybrid of historical federal admissions and cabaret taxes and that recent venue growth has shifted much of LET collection from gaming venues to large non-gaming venues.

Michael Nakamoto, Chief Principal Deputy Fiscal Analyst, told the committee the LET is administered under Nevada Revised Statutes (NRS) Chapter 368A, with the Gaming Control Board responsible for licensed gaming establishments and the Department of Taxation responsible for non-gaming venues. He described the tax as 9% of the admission charge (as standardized by 2015 legislation) with limited carve-outs including the first $150,000 each fiscal year collected by the Department of Taxation to the Nevada Arts Council and exemptions for certain educational and professional sports events.

Nakamoto and staff emphasized practical limits on tracing LET to a single facility: taxpayer confidentiality and promoter-level remittance practices frequently prevent public reporting of venue-level LET. "There is really not a way" to show LET by venue in public reports because promoters may remit aggregated receipts across multiple venues and confidential taxpayer rules prevent disclosure, he said; auditors and regulators may obtain venue detail in audits but cannot publicly disclose confidential filings.

Committee members and agency staff reviewed what counts as "live entertainment" under statute (music, dance, acting, athletic events, DJ performances and related enumerated activities), and which activities are excluded or treated differently. Staff noted that professional sports teams based in Nevada are exempt from LET under current law, while unarmed combat (boxing, UFC) is governed by the State Athletic Commission and subject to a separate license fee (currently 8% under NRS 467). Escorts and some adult services are included in LET when they meet statutory definitions and reporting rules; reported receipts for escort services were cited for FY25 (~$1.5M) and FY26 filings-to-date (~$470k).

The briefing included a timeline of Nevada's statutory changes: the 1965 casino-entertainment framework, the shift to LET in 2004, and the 2015 overhaul (Senate Bill 266) that standardized the rate at 9%, added certain exemptions and set the Arts Council carve-out. Staff also reviewed past and proposed bills that sought to broaden the base (for example, the NEAT proposals and luxury/discretionary proposals that would have applied lower rates to a broader base), bills that would tax resale of ticket-price increments, and the 2021 proposal to remove the professional sports exemption (which staff later narrowed to a limited technical amendment that became law in a different form).

Members pressed staff on the economic and equity effects of changing the LET: how to measure elasticity of demand for entertainment, what counts as the burden on tourists versus residents, and whether broadening the base could permit a lower rate ("widen the base, drop the rate"). Senate and assembly members asked fiscal staff to prepare updated estimates for proposals under consideration (e.g., removing the professional-sports exemption, taxing resale increments, or moving admissions items into the sales-and-use-tax base), and asked for micro-level calibration where feasible (venue size, small vendor impacts) while acknowledging confidentiality limits.

Staff also presented local-government options for revenue-sharing, including moving LET into the sales-and-use-tax base (which would require voter approval in Nevada), granting counties optional LET rates, or dedicating a portion of state LET proceeds to local or regional entities (for example, dedicating a portion to transit through the RTC). The briefing concluded with staff offering to run updated fiscal calibrations and elasticities to inform August committee work.