Works of fine art for public display: Collection of admission fee for exhibition. [Effective through December 31, 2005.]
1. A taxpayer may collect an admission fee for the exhibition of fine art otherwise exempt from taxation on its sale, storage, use or other consumption pursuant to NRS 374.291 if the taxpayer offers to residents of the State of Nevada a discount of 50 percent from any admission fee charged to nonresidents. The discounted admission fee for residents must be offered at any time the exhibition is open to the public and admission fees are being charged.
2. If a taxpayer collects a fee for the exhibition of fine art otherwise exempt from taxation on its sale, storage, use or other consumption pursuant to NRS 374.291 and the fee is collected during the first full fiscal year after the purchase of the fine art, the exemption pertaining to that fine art must be reduced by the net revenue derived by the taxpayer for that first full fiscal year. The exemption pertaining to fine art must not be reduced below zero, regardless of the amount of the net revenue derived by the taxpayer for that first full fiscal year.
3. Any tax due pursuant to this section must be paid with the first sales and use tax return otherwise required to be filed by the taxpayer following the 15th day of the fourth month after the end of the first full fiscal year following the purchase of the fine art or, if no sales and use tax return is otherwise required to be filed by the taxpayer, with a sales and use tax return filed specifically for this purpose on or before the last day of the fourth month after the end of the first full fiscal year following the purchase of the fine art.
4. A taxpayer who is required to pay a tax resulting from the operation of this section may receive a credit against the tax for any donations made by the taxpayer to the Nevada Arts Council, the Division of Museums and History Dedicated Trust Fund established pursuant to NRS 381.0031, a museum that provides exhibits specifically related to nature or a museum that provides exhibits specifically related to children, if the taxpayer:
(a) Made the donation before the date that either return required pursuant to subsection 3 is due; and
(b) Provides to the Department documentation of the donation at the time that he files the return required pursuant to subsection 3.
5. For the purposes of this section:
(a) “Direct costs of owning and exhibiting the fine art” does not include any allocation of the general and administrative expense of a business or organization that conducts activities in addition to the operation of the facility in which the fine art is displayed, including, without limitation, an allocation of the salary and benefits of a senior executive who is responsible for the oversight of the facility in which the fine art is displayed and who has substantial responsibilities related to the other activities of the business or organization.
(b) “Net revenue” means the amount of the fees collected for exhibiting the fine art during the fiscal year less the following paid or made during the fiscal year:
(1) The direct costs of owning and exhibiting the fine art; and
(2) The cost of educational programs associated with the taxpayer’s public display of fine art, including the cost of meeting the requirements of subsubparagraph (IV) of subparagraph (1) of paragraph (a) of subsection 4 of NRS 374.291.
Last modified: February 27, 2006