Nevada ogles the potential tax dollars of legal prostitution

A lawmaker is proposing legalizing brothels in Reno and Las Vegas. Gambling revenue is down sharply in the state.

By Ashley Powers
January 23, 2009

Reporting from Las Vegas — In revenue-strapped Nevada, where foreclosed homes dot suburban streets and poker tables sit empty, it’s come to this: A state legislator wants to talk about legalizing — and taxing — prostitution in Reno and Las Vegas.

“It’s almost de facto legal. It’s running unregulated,” said state Sen. Bob Coffin, a Democrat who chairs the Senate Taxation Committee. He also said legalization would better protect sex workers.

Brothel statusCoffin, a Las Vegas insurance broker and book dealer, said he’s also willing to discuss taxes on Nevada’s legal brothels, strip clubs and escort services, which are heavily promoted along Las Vegas Boulevard.

Further government regulation of the sex industry would be likely to draw ire from social conservatives, casino executives, feminists and suburbanites who prefer not to think about the bordellos down the road. It also would test Nevadans’ tolerance for brothels, a Wild West throwback unique to their state and legally confined to counties with fewer than 400,000 residents.

“I think it’s an appalling way for a state to make money,” said Melissa Farley, executive director of the nonprofit Prostitution Research and Education group in San Francisco. “Once there’s an awareness of what prostitution does to women, it makes no sense to allow it, to tax it, to decriminalize it or mainstream it.”

Though experts said legalizing prostitution in Nevada’s urban centers was unlikely, rural brothels have asked at least twice to pay state taxes. Some owners believe prostitution is less likely to be outlawed if it contributes to state coffers.

“What are we going to say? That we don’t want your tax dollars?” asked David Damore, associate professor of political science at the University of Nevada at Las Vegas. “How do you look a gift horse in the mouth when we’re hurting so badly?”

Coffin’s initiative comes as Nevada’s economy is foundering. Compared with the same month in 2007, November gaming revenue was down almost 15% statewide. Taxable sales in October were down 6.2%.

In lieu of raising taxes, Republican Gov. Jim Gibbons has proposed, among other things, slashing funding for higher education and cutting the pay of teachers and state workers. Democrats, who control the Legislature, have roundly drubbed those ideas.

In that context, Coffin said, it would be irresponsible not to look at Nevada’s sex industry as a possible revenue source.

“When you’re talking about cutting funding for the mentally ill and increasing class sizes for little kids . . . and someone tells me they don’t want to tax prostitution, I’m going to call them a hypocrite to their face,” Coffin said.

Coffin, who has yet to put in a bill draft request, isn’t afraid of provoking debate and riling members of his own party, said Eric Herzik, chairman of the political science department at the University of Nevada at Reno. And when the state’s part-time Legislature convenes next month, he said, Coffin’s suggestions might fare better than previous attempts.

“If everything is on the table — and both sides say it is — then why not talk about expanding prostitution?” Herzik said. “I can’t imagine the Neon Bunny Ranch on the Strip, though I’m sure it would make money.”

In 1991, Mustang Ranch owner Joe Conforte attended a legislative hearing on a so-called bedroom tax. Lawmakers were unmoved, and Conforte later fled the country to dodge paying federal taxes.

In 2003, the brothel industry tried again but was exempted from a live-entertainment tax, which an industry lobbyist said deprives the state of about $2 million annually. That same year, Las Vegas Mayor Oscar Goodman suggested that opening Amsterdam-like bordellos downtown could help redevelopment efforts.

This time around, some brothels are on shakier financial ground and might not be as receptive to a state tax, said Geoff Arnold, president of the Nevada Brothel Assn. and owner of bordellos in Wells and Battle Mountain. Though he too is wary, he said he would support legalizing prostitution in Reno and Las Vegas.

“From the standpoint of the industry, legal and regulated is always better than illegal and unregulated,” he said. “It would hurt me financially because I have an exclusive. But overall it would be better for everyone.”

Link to original story at LA Times


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