Organizers of the Burning Man counter-culture celebration are challenging the enforcement of a Nevada state tax that they say could cost them nearly $3 million.
Burning Man officials said in a letter to the state Department of Taxation on Friday that the festival should be exempt from the recently amended tax on live entertainment, the Reno Gazette-Journal reported Saturday.
The 25-year-old annual arts festival attracted about 80,000 participants this year to the Black Rock Desert 100 miles north of Reno.
Burning Man attorney Ray Allen said the nine percent tax would translate into a tax bill of about $2.8 million. He said the tax is known by some as the "Burning Man tax."
"From our perspective, this is the latest attempt by an outside entity to unfairly tap the resources of Burning Man and its participants," event organizers said in a statement posted on their web site. "Some seem to view Burning Man as the 'golden goose' they can turn to when they want money for other projects."
Burning Man officials said they will not set 2016 ticket prices until they hear back from the taxation department because they could be forced to bump up the cost of entry to the temporary village dubbed "Black Rock City." They urged the department to respond by Jan. 15.
In June, the Legislature approved a revised version of the live entertainment tax, which originally came into law in 2004 as a way for the state to gain revenue from Las Vegas's robust live entertainment industry. The revised version became effective Oct. 1.
Certain events — including school, sporting, racing and nonprofit events attended by fewer than 7,500 people — remain exempt from the tax. Burning Man and the Electric Daisy Carnival, a music festival held in Las Vegas, were the two largest events newly affected by the change.
Burning Man maintains it should be treated as it has historically during the weeklong celebration that culminates with the burning of a towering, wooden effigy the day before Labor Day.
"Black Rock City is not an arena concert, a sporting event or a Las Vegas show; it's a thriving metropolis with all the trappings of a functioning temporary city, with people camping, cooking meals, visiting neighbors, and exploring the offerings of its citizens," the organization said in its online statement.
"While the Burning Man organization provides the space and basic infrastructure for Black Rock City, we simply don't provide live entertainment as defined by the statute."
Burning Man previously was exempt because it was an outdoor event, said ex-House Speaker Marilyn Kirkpatrick, D-Las Vegas, who co-sponsored the bill in March. No other newly affected organization, including the Electric Daisy Carnival, had qualms with paying the tax, she said.
As is, the tax brings in about $137 million annually, most of which goes toward the state's general fund. About $150,000 will go toward the Nevada Arts Council in the future.
"It's just a sign of the times. Entertainment has changed," Kirkpatrick said. "There's no way we could have predicted in 2003 that there would be an event like Burning Man. It's disappointing that they take it so personal."
Burning Man previously stated that an increase in ticket prices may be necessary to cover the tax. General admission tickets in 2015 were $390, a $10 increase from 2014.
Information from: Reno Gazette-Journal, http://www.rgj.com
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