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Nevada considers reducing deficit by taxing brothels
Adam Goldman
Associated Press
Feb. 15, 2003 12:00 AM

PAHRUMP, Nev. - The manager of one of Nevada's ritziest brothels proudly walks the 297 acres that surround the Resort at Sheri's Ranch, pointing to the new expansion that opened last year. She glows when talking about the sports bar with a commercial kitchen, the themed bungalows, the Jacuzzi rooms.

"Business is good," Laraine Harper says.

So good that several influential Nevada lawmakers think the industry should do more than fulfill sexual fantasies. The state faces a deficit of up to $704 million, and some legislators want to tax the fees of Nevada hookers in what could be the ultimate sin tax.

"Everybody should pay," says Assemblywoman Sheila Leslie, D-Reno. "It should be taxed just like any other entertainment."

Taxing bordellos, though, could further legitimize an industry that many people in the state would rather ignore, hurt small rural counties that depend on revenue from local brothel taxes and drive legal prostitutes into the illicit world of private practice.

The owners aren't particularly enthused, either.

"What are the girls going to do?" asks Geoff Arnold, president of the Nevada Brothel Association. "Have a calculator in the room? The girls aren't the best at math."

They may have to learn.

Gov. Kenny Guinn has proposed a 7.3 percent tax on entertainment and admissions that's expected to generate $82.5 million in its first year. His proposal lists movies, professional sporting events, adult cabarets, strip clubs, art galleries and beauty contests, among others, as subject to the tax. Brothels aren't listed in the 1,100-page proposal, but they also are not listed among exempted businesses, which include massage, yoga, recreational rentals and golf.

Perry Comeaux, the state's director of administration, says the details will be fleshed out by lawmakers.

There are 28 licensed brothels operating in 10 of Nevada's 17 counties. They generate tens of millions of dollars in profits, Arnold says, though precise numbers are guarded as trade secrets. The state Health Division estimates 365,000 sex acts, or 1,000 a day, are performed in Nevada's brothels annually.

The brothels employ hundreds of women and paid more than $500,000 to counties for licenses, room taxes and other fees last year. The counties use the money for a variety of purposes; in Nye County, it finances a $120,000-a-year ambulance service.

Some counties fear a state tax would could pinch off that revenue.

"If it puts one of them out of them business, it would hurt the county," Storey County Commissioner Greg Hess says. "For some of these rural counties, the brothels are a major source of income. It's pretty hard to replace that income."

Prostitutes are contract workers, with most splitting their fees with the brothels. Prices can range from $200 to $50,000 at Sherri's, which is about an hour west of Las Vegas in dusty Pahrump.

Sheri's is valued at $4.5 million, says Toni North, chief deputy treasurer of Nye County. Harper says that the expansion cost $7 million and that the brothel intends to build a $42 million golf course. The brothel, which bills itself as "world famous," handled more than 10,000 customers last year.

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