Tens of thousands of revelers have made their way to the Black Rock Desert in northern Nevada each year since 1990, when the Burning Man festival relocated from San Francisco. In the years since, other festivals have found a home in Las Vegas, including the Electric Daisy Carnival, the iHeart Radio festival and Rock in Rio, formerly held in Brazil. Now, festival organizers are concerned that a change to Nevada's tax laws could endanger some of these festivals, and harm Nevada's reputation as a mecca for summer music gatherings. State legislators last month enacted an overhaul of the tax charged on concert admissions because the old two-tier system had so many loopholes that it was extremely difficult to enforce. Under the proposed change, any ticket sold to an event at a venue holding 15,000 or more would be subject to a 9 percent tax.
"Nine percent is a huge tax," exclaimed Gary Bongiovanni, the editor-in-chief of Pollstar, a concert industry trade magazine. He went on to say that he was surprised that Nevada, of all places, is imposing such a tax. "People from California move to Nevada to get away from taxes," he said. Festival organizers have been largely critical of the new tax, saying that festival attendees already pay their share by supporting local businesses and by paying sales tax and taxes on alcohol, gas and tobacco. A spokesman for the Electric Daisy explained that the move doesn't make sense because the profit margins for festivals are already so low. The Electric Daisy lost $3 million in its first year in the desert and posted another loss in its second year.
"We have to build a city from scratch for 140,000 people," noted Pasquale Rotella, the founder of Insomniac, which puts on the annual festival. Rotella added that organizers are required to bring in power to the parking lot of the Las Vegas Motor Speedway, where the Electric Daisy takes place, in order to operate carnival rides and other attractions that make the festival more than just a live music event. The promoter also noted that his company has tabled discussions about bringing new events to the state of Nevada, at least until the impact of the tax is known. The tax won't be active until October, after the Electric Daisy takes place, but it would essentially mean an extra $32 for fans purchasing a three-day general admission pass for $360. That extra $32, Rotella said, might be the reason that keeps thousands from attending.
As you might expect, legislators defended the new tax. Republican Senator Mark Lipparrelli, who co-sponsored the bill, said the move will prevent double-taxing at some events as it exempts food, beverage and merch purchases from taxation. That move, the Senator said, means that tax revenue from these festivals will really be about the same, as food represented a significant source of tax revenue under the old system. The true impact of the tax won't even be able to be measured until next summer, of course, as most fetivals will have already taken place when it goes into effect in the fall.
