Tax Burning Man? Nevada Considers It, Promoters Bristle

Tens of thousands of Burning Man fans are waiting for 2016 tickets to go on sale, but first, they’ll have to wait for the non-profit to resolve a tax dispute with Nevada. The non-profit that runs Burning Man is appealing a new tax that could cost nearly $3 million.

Ray Allen is general counsel for the Burning Man Project, which organizes the massive dessert gathering in the Black Rock Desert, along with a growing number of baby Burning Mans elsewhere in the world. Allen says Nevada tweaked its live entertainment tax last year, “but it didn’t seem to apply to us because it mostly had to do with live entertainment. And Burning Man is not a concert. It’s not an arena event. It’s not a casino show. At Burning Man, people come for the experience that they bring themselves.”

Burning Man, Allen says, creates a venue where live entertainment happens, like porta-potties, roads, and medical services.

“Obviously, some of our members do things that others may find entertaining,” Allen said. “However, the statute says that the organization that’s going to be taxed has to provide those activities. Our organization, we provide infrastructure.”

So Burning Man appealed, estimating the tax change could cost $2.9 million. That could force the Project to raise ticket prices by as much as $35 above last year’s main sale price of roughly $390. That’s a steep entry fee for a week in a no-commerce zone where participants give away everything for free.

Eric Evans of Mountain View has gone to Black Rock City for the last three years as part of Camp Hardly, one of about 50 camps from the South Bay. Camp Hardly stages a Western-themed whiskey saloon.

Evans says the tax is objectionable. “It is a relatively small cost. However, one of the big things about tax is, it should be applied fairly.”

A civil engineer off the Playa, Evans feels differently about the $40 vehicle pass introduced in 2014. That, he says, was fair “as a way to reduce the total number of vehicles going to the event and to encourage car-pooling.”

But he’d rather pay the tax than see Burning Man move someplace else, like Utah.

“No matter how unfair it may be, I think it would be the least difficulty for the participants if we just grudgingly accepted a tax,” Evans says.

The tickets are already too expensive for many attendees. Summer Love, a Los Gatos resident, was gifted her first ticket, and heartily wishes that would happen again. She comes to Burning Man with Salon Soleil, a space hosting philosophical, salon-style discussions on the Playa.

“Burning Man’s principle of gifting is a wonderful, Utopian experience that I do cherish,” Love says, “but the actual amount of money it takes to go is quite considerable.” Travel, food, shelter, water, ice all add up, she says, not to mention the cost of putting on a show for yourself and others, with costume, lights, art cars, et cetera.

The State Bill That Changed the Rules

Before SB 266, Burning Man was exempt from the tax as a 501(c)3 non-profit. Now, the exclusion from the tax no longer applies to non-profits who offer for sale 7,500 tickets or more and where the patrons participate in that entertainment and, “the number of tickets to the activity offered for sale or other distribution is 15,000 or more.”

Click here to read Burning Man’s letter to the Nevada Department of Taxation

Nevada tax officials declined to comment specifically about the Burning Man Project’s appeal, citing confidentiality rules, but a spokeswoman would say the department will make every effort to respond by the end of January.

From its modest beginning as a 35-person party on San Franciso’s Baker Beach in 1986, the event has grown exponentially. Brian Doherty in his book This is Burning Man explains media coverage helped turn a little underground event favored by ravers into what Time Magazine dubbed the “bonfire of the techies” in 1997.

Burning Man does pay taxes to the BLM for using the land. It’s the largest Special Recreation Permit in the United States. Roughly 66,000 people attended in 2014. The nonprofit that year was worth $9.6 million, according to tax forms filed with the IRS.

Allen says Burning Man brings in $50 million to the state of Nevada, including $10 million that event organizers spend on contracts in Nevada. As Burning Man grows, so do the attempts to get a piece of the action. Back in August, the US Bureau of Land Management backed away from a request for Burning Man to pay for a $1 million on site headquarter for law enforcement, plus a “Blue Pit Compound” to house those officers and officials from Washington, D.C, plus 24-hour access to ice cream, according to the Reno Gazette-Journal.

A decision against Burning Man could lead to another appeal. Could that process put ticket sales on hold for months? Years? “Hopefully not,” says Allen. “Burning Man has a very good record of working and collaborating with the state agencies, and federal and local agencies that permit the event. So I’m hopeful that this will get resolved very soon.”