The Tax Commission changed its regulations Monday in an attempt to give a break to small craft makers and artists who sell their wares at homeshows and fairs like Genoa's annual Candy Dance.
Representatives from Reno and Las Vegas tourism boards raised the issue, complaining the new tax law hits the smallest exhibitors at local arts and crafts shows with a $100 business license, the commission.
The new tax law SB8 requires all Nevada businesses bringing in more than $22,000 a year or who rent or lease space to do business to buy an annual state business license for $100. In its plain form, the law would apply that rule even to exhibitors at craft shows because renting the booth for three days constitutes a leased space.
The initial reaction from at least one crafter was good.
Charron Silveira of Douglas County said she had been concerned about the cost of the license to her business, Char's Stuft'Tique because she like some others only does one or two shows a year. She said the compromise would "absolutely help."
"I'm planning on doing as many shows as I can this year and the good shows are kind of expensive," she said. "Absolutely this will help. And if I'm ever making $22,000, I'll pay the $100."
The issue, which State Sen. Randolph Townsend, R-Reno, described as an unintended consequence as lawmakers pushed tax legislation through in the final days of a special session last July, was a special concern to smaller Nevada communities.
Assembly Minority Leader Lynn Hettrick, R-Gardnerville, said it could cause serious harm to the Candy Dance and other Douglas County events. Sen. Mike McGinness, R-Fallon, said the Soroptimist Club's annual fair in Fallon could also be hurt.
Luke Puschnig of the Las Vegas convention authority said for the smallest of craft exhibitors, the $100 fee might be enough to keep many small operators from coming to a show in Nevada.
"These exhibitors are not the IBMs of the world." he said, adding that $100 might be a large part of their net profit for a show.
Lynn Thompson of Reno-Sparks Convention and Visitors Authority said that could drive some vendors away, reducing variety at such shows, causing producers to lose money and even cancel some shows. And both said the events most affected would be the smallest shows and fairs in Nevada's small rural communities.
Commissioner David Turner said the state should write its rules to exempt participants in those shows from paying any business license.
"We've got a convention authority we've got to support and if we're driving business out of there, I've got a problem with that," he said.
But Commissioner Joan Lambert said she had a problem with a blanket exemption, pointing out that many of those small crafts businesses from Nevada will have to pay the annual fee anyway. She said those from out of state would benefit most from a blanket exemption.
"I don't want to drive those businesses out of Nevada, but I want to be fair to Nevada business," she said.
Commission Chair Barbara Smith-Campbell said many of the vendors do several shows a year and that the $100 can be split between five or six shows.
Turner suggested a compromise regulation stating that if the only outside space a small exhibitor rents in a year is at a trade or craft show, they are exempt from the annual fee. He said that would exempt the smallest exhibitors both from Nevada and out of state from the annual fee.
But Turner said he still preferred to exempt exhibitors altogether pointing out that major corporate exhibitors at trade shows are already exempt from the fee.
The plan was approved 4-2 by the commission.
Contact Geoff Dornan at nevadaappeal@sbcglobal.net or 687-8750.
