The Ultimate Sin Tax

March 1, 2003 12:00 AM

Nevada considering tax on prostitutes.Facing over $700 million in debt, Nevada (which has no state income tax) is considering taxing the fees paid to professional prostitutes in Nevada brothels. Everyone's angry, from the prostitutes upset about more of their fees being levied to anti-prostitution folk worrying about the legitimization of "industry that many people prefer to keep at arm's length." (Reporter's words, not mine) Should legalized prostitution be classified as "entertainment" and taxed? Will county revenues be hindered? Would I be considered a charitable deduction? And if the outraged hookers protest, what are the odds of Disney making a musical?
posted by XQUZYPHYR (15 comments total)

The question isn't legitimacy. The state has had the opportunity to ban prositution for decades and has never passed a statute.

The problem is that, outside of gambling and tourism, Nevada has no revenue base. For the rural counties, which were formely supported by mining, prositution provides a steady flow of taxable revenue.

The fact remains that Nevada's tax woes aren't due to a dip in revenue, rather the gaming industry is viewed as untouchable by the legislature. Taxes on gaming revenue, while commonly proposed, are never passed. Even as several strip hotels undergo multi-million dollar expansions, and gaming revenues increase, the legislature is paralyzed and unable to procure revenue from the most obvious source: tourism. The govenor, among others, campaigned heavily on the premise of increasing the tax base. He, and his administration, has failed, miserably.

And forget a state income tax. The casinos would never allow it.
posted by Psionic_Tim at 12:19 AM on March 1, 2003

Nevada has been looking the other way for decades now when it comes to the adult playground services available in the state. I was shocked that they voted not to legalize marijuana recently. I bet they won't end up taxing prostitution, for one main reason - taxation would demand accountability in a 75% cash based industry. It's going to be extremely difficult to follow the money around a business that consumers hold privacy paramount, I would think.

However, maybe Amsterdam has a model that efficiently works for prostitution taxation?
posted by jdaura at 12:49 AM on March 1, 2003

I say go for it.
posted by delmoi at 1:34 AM on March 1, 2003

If the other 49 states were so enlightened, we probably wouldn't be in this budget crunch now. Well, except Utah.
posted by owillis at 2:01 AM on March 1, 2003

"Arm's length" seems pretty close to me, actually. There's plenty a prostitute can do with just an arm.
posted by hot soup girl at 2:07 AM on March 1, 2003

this kind of remind me of an old Onion story about Nevada repealing all the laws in the book in the name of deregulation -- that was pretty funny

as a non-gambling Vegas fan -- it's a very interesting city, on so many different levels, a cultural and sociological study in 3-D going on 24/7 -- I don't know the rest of the State at all, I've only driven thru it on my way to Vega$, but I have to say this doesn't sound right.
Legalized prostitution is unusual enough, and the idea of those brothels is unpleasant enough already that taxation of their revenues seems to be pretty crass to me.
Hate to use the unavoidable pun, but those poor girls are getting screwed twice and it does not sound right to me
posted by matteo at 4:33 AM on March 1, 2003

I have no problem with taxing income, no matter how it is earned, but why not the brothel owners? Or are these women free lancers?
If you can tax cigarettes and booze why not girls who offer sexual services" Would you tax rubbers, vibrators, handcuffs? All are but toys in the trade and you can consider them hardware and the girls as software.
posted by Postroad at 5:14 AM on March 1, 2003

Our new flesh tax overlords
posted by stbalbach at 7:02 AM on March 1, 2003

Even as several strip hotels undergo multi-million dollar expansions, and gaming revenues increase, the legislature is paralyzed and unable to procure revenue from the most obvious source: tourism.

My impression is that the tax-base is already structured around tourism, and that's exactly the problem. The state has no ability to withstand downturns in tourism. In that sense, I don't see what taxing prostitution is going to help.

'swhy I'm happy to be in Reno, where they're at least making moderate efforts to bring in non-casino, non-tourist business (such as warehousing & shipping centers for Barnes & Noble and JC Pennys). But then, I'm probably speaking from prejuidice, since I don't follow things in Las Vegas very closely.
posted by claxton6 at 8:59 AM on March 1, 2003

The state has had the opportunity to ban prositution for decades and has never passed a statute.

NRS 244 345 (8) Limitation on licensing of houses of prostitution. In a county whose population is 400,000 or more, the license board shall not grant any license to a petitioner for the purpose of operating a house of ill fame or repute or any other business employing any person for the purpose of prostitution.

That seems pretty clear to me that prostitution is recognized as illegal (albeit, in counties over 400,000) in the Nevada law books.

outside of gambling and tourism, Nevada has no revenue base

Nevada Economy At A Glance 2002: "Despite job losses in tourism, service sector employment has increased by 5,300 since September 2001. Personal services, health services, and business services have all shown increases of at least 4.2 percent statewide in the past year. The business services increase of 6.1 percent could be an especially positive sign. The hiring of temporary help as business improves is often a precursor to permanent hiring. Additional good news comes from the construction sector. New home construction, fueled by low interest rates, has kept the construction industry busy between megaresort construction cycles."

Also: "After five years of rapidly declining employment, the state’s mining industry appears to be stabilizing."

The employment purview isn't limited to the casinos. Nevada faces more or less the same problems that many other states face: a limp economy and a growing service sector.
posted by ed at 9:12 AM on March 1, 2003

Jesus, I can just imagine the institutional nightmare that would rise up here in California if they legalized and taxed prostitution.
posted by 2sheets at 9:35 AM on March 1, 2003

That seems pretty clear to me that prostitution is recognized as illegal (albeit, in counties over 400,000) in the Nevada law books.

Which is to say, Las Vegas. (I'm surprised that Washoe County, home of Reno, doesn't meet the 400,000 cut, though I don't believe that prostitution is legal here, regardless.)

It's interesting that the At-a-Glance mentions very little growth and development in Las Vegas outside of casino work.
posted by claxton6 at 11:08 AM on March 1, 2003

How much money is the state going to get from the federal government for storing the radioactive waste at Yucca?
posted by vito90 at 8:36 PM on March 1, 2003

Postroad:
The women are independent contractors. At least, the brothels try to make them independent contractors. That's the source of Joe Conforte's troubles with the IRS.
Claxton6: $8 an hour warehouse jobs aren't cutting it. The area needs to draw higher paying jobs than that.
Prostitution is illegal by state law in Washoe County (Reno), Carson City and Clark County (Las Vegas) and by county law in Douglas County (South Lake Tahoe) and probably a few others.
posted by stevefromsparks at 10:23 AM on March 2, 2003

Did someone say Amsterdam?

Yumm...
posted by eas98 at 7:19 AM on March 3, 2003