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Panel: Art Tax Breaks Should be Rewritten

”The Legislative Commission's Committee to Review Regulations decided unanimously that the state Tax Commission should rewrite its proposed rule because it goes beyond lawmakers' intent in authorizing the tax breaks in 1997 and 1999.

”…The Tax Commission's proposed rule said interest on borrowed money used to acquire art could be included in figuring the tax break -- but the loan would have to be specifically for the art purchase.

”MGM Mirage, which acquired and later sold part of Nevada casino mogul Steve Wynn's art collection, pressed for a broader interpretation, such as interest on part of a general line of credit that's used for art deals.

”…Harvey Whittemore, representing MGM Mirage, said critics of the tax break in 1997 argued it seemed too broad -- and that's what was ultimately approved.

”Whittemore added the specific-loan requirement on art deals pushed by the Tax Commission would be `a major problem to the taxpayer.’

”Tax Commission lawyer Norm Azevedo countered that lawmakers have directed the commission and state Taxation Department to be clear on tax breaks and `put taxpayers on notice about what's expected of them.’

”…The delay is the latest of many in the drafting and adoption of rules that stemmed from the 1997 law designed to help Wynn avoid taxes on hundreds of millions of dollars worth of paintings he bought for display at the art gallery at the Bellagio megaresort on the Las Vegas Strip. Wynn has since sold the property to MGM Mirage.

”…Under the law approved in 1997 and revised in 1999, any person buying fine art valued at more than $25,000 can get breaks on most of the due sales taxes, along with annual personal property tax exemptions.

”The law allows the breaks if the art owner agrees to publicly display the art at least 20 hours per week during 35 weeks in a year…”

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