Yet such is the case for Nevada’s brothels, a $50-million-a-year industry that pays significant amounts of tax to the rural counties in which they operate but only a $100 business license fee to the state.
The industry’s lobbyist, George Flint, director of the Nevada Brothel Association, has been approaching the Legislature’s leadership for months about creating an entertainment tax that would require the state’s 25 legal brothels to give the state some money on a per-transaction basis.
“I am a voice crying in the wilderness,” said Flint, who does not own any brothels himself. “It’s not going to make a hell of a lot of money, but we would be happy to pay our fair share. We can’t even get a hearing. The speaker of the House told me, ‘As bad as it is, I don’t think we want to go there.”‘
Nevada is the only state where prostitution is legal, but by state law it also is restricted to counties with fewer than 400,000 residents. That outlaws it in two counties, Clark, which contains Las Vegas, and Washoe, which contains Reno. There are about 225 women licensed by the state as prostitutes; no county allows brothels to have men who sell sexual services.
Still, since 1971, when prostitution was legalized, Nevada has added more than two million residents and become significantly more socially conservative. The state has also lost much of its frontier mentality, so Flint acknowledges that the tax effort is “something of an insurance policy” against the Legislature’s deciding one day to do away with the industry.
“Anytime you’re going to take tax money, the state’s not going to view you as a relic of a past time and put you out of business,” said Flint, who said he was gaining traction for a brothel tax in 2003 until he made the faux pas of joking to a reporter that he would commit to putting the governor’s portrait in every prostitute’s lair along with a note reading, “Don’t forget the governor’s share.”
Like most states, Nevada is facing economic problems. Governor Jim Gibbons, a Republican, submitted to the Legislature this month a budget that included 6 percent pay cuts for teachers and a 36 percent reduction in all higher-education financing to help close an expected $1.8 billion revenue gap created in part by dwindling tourism profits and a collapsing housing market.
Gibbons’s budget – which proposes the deep cuts to avoid any tax increases, in keeping with his 2006 no-tax-increases campaign pledge – was rejected out of hand by leaders of the State Senate and the House, both of which are dominated by Democrats. In Speaker Barbara Buckley’s response to the proposal and to Gibbons’s State of the State address on Jan. 15, she vowed to “gather all the facts, tap the best minds in the state, hear all points of view and commit ourselves to finding meaningful solutions.”
Still, Buckley said she did not support taxing brothels because she believed that to do so the state would have to legalize prostitution in the largest counties, “and I just don’t support the idea.” Asked why she supports prostitution in some areas of the state and not others, Buckley declined to answer except to say that legalization came “way before the time I was elected.”
Flint does have at least one legislative ally, Senator Bob Coffin, a Las Vegas Democrat and the incoming chairman of the Senate Taxation Committee. Coffin said he was willing to hold a hearing on the matter in the coming legislative session, which starts next month.
Coffin disputed the speaker’s assertion that a brothel tax would require statewide legalization and called it a “legal backdoor” to avoid the matter.
“There is a way to make it work, just as we make all these other legal contortions work based on population,” he said. “You can do it if the legal counsel says we can do it. And we should, because the brothels have been essentially exempted from the sharing of the burden that we all have to spread around on as many people as possible so the impact is less.”
Not all brothel owners support Flint’s efforts. Dennis Hof, owner of the Moonlite Bunny Ranch in Mound House, said his brothel was the “highest private taxpayer in Lyon County” and questioned why anyone would “consider another layer of tax on me. It’s unbearable in this economy.”
Hof, whose brothel is the subject of the long-running HBO reality show “Cathouse,” said he paid $78,000 a year for his county business license and $25,000 a year to the local health department officials. “The legislators are saying they’ve got bigger issues to deal with,” said Hof, who has long disassociated himself from Flint and the brothel association. “The state needs $1 billion. The money they would get from a brothel tax is a small amount of money. So why bring it up? If the Legislature thinks they need to get some more money from us, we’ll deal with it on our own.”
And even brothel owners who support the idea of being taxed by the state are not as worried as Flint is that the Legislature might ban the business. James Davis, owner of the Shady Lady Ranch in Scotty’s Junction, said legislators from the smaller counties would never allow the state to eliminate one of their few reliable sources of local tax revenue.
Buckley said she suspected that Flint’s motive was to first have the industry taxed by the state and then build a case for legalizing it in the larger counties. And Flint acknowledged that he hoped he could show the Legislature how much money the state is losing by not regulating and taxing the booming illegal prostitution industry in Las Vegas. (The closest legal brothels to the Strip are more than 60 miles, or 95 kilometers, away in Nye County.)
Flint has another outspoken ally, Mayor Oscar Goodman of Las Vegas, long an advocate of having legal brothels in the city. The mayor said that Nevada’s reputation is such that most travelers already believe that prostitution is legal throughout the state.
“They tell me we’re missing tens of million of dollars that could be used for the school system, to keep jail guards employed, to provide mental health services,” Goodman said.
“I also believe that by regulating and controlling this business, we could make it much safer for the customers as well as the prostitutes. We kid ourselves and we’re very disingenuous if we pretend that there isn’t rampant prostitution now that is unsafe for which we get no tax revenue.”
