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1550 College Parkway, Suite 115


Carson City, Nevada 89706-7937
Phone:(775)684-2000 Fax:(775)684-2020

BRIAN SANDOVAL.
Governor
JOAN LAMBERT
Chair, Nevada Tax Commission
DEONNE CONTINE
Executive Director

LAS VEGAS OFFICE


Grant Sawyer Office Building, Suite1300
555 E. Washington Avenue
Las Vegas, Nevada 89101
Phone:(702} 486-2300 Fax:(702)486-2373

RENO OFFICE
4600 Kietzke lane
Building L, Suite 235
Reno, Nevada 89502
Phone:(775)687-9999
Fax:(775)688-1303

HENDERSON OFFICE
2550 Paseo Verde Parkway, Suite 180
Henderson, Nevada 89074
Phone:(702)486-2300
Fax:(702) 486-3377

February 2, 2Q16
Via Certified Mail: 701595240001784576$9
Elizabeth B. Stallard
Downey Brand ALP
100 W. Liberty St., Ste. 900
Reno, NV 89501
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Dear Ms. Stallard:


You have requested an advisory opinion (`Opinion") from the Department of Taxation
("Department") regarding the treatment of various issues for sales and use tax purposes. A
discussion of those issues, as well as conclusions, follows. Please be advised that the
opinions expressed in this Opinion are limited to the specific facts, circumstances, and
transactions described in the information you provided in your correspondence to the
Department. No reliance should be placed on this Opinion for any purpose other than that
described herein. Please be further advised that subsequent statutory or administrative rule
changes or judicial interpretation of the statues or rules upon which any opinion is based may
subject similar future transactions, situations, claims, or requests to treatment other than that
expressed in this Opinion.

1. Do the activities that take place during the Burning Ilan event constitute live
entertainment for purposes of the Live Entertainment Tax ("LET")?
2. Does Black Rock City meet the definition of a facility for the purposes of the LET?
3. Is Burning Man subject to the LET?

The activities that take place during Burning Man constitute live entertainment, whether
or not those activities are provided by patrons to the event. Because Black Rock City is
located on public land and access to the area during the event is limited to those who have
purchased tickets, it meets the definition of a facility. Because Burning Man collects the
taxable receipts from those attending the event, Burning Man is the taxpayer and responsible
for paying LET to the State of Nevada.

Elizabeth B. Stallard
February 2, 2016
Page 2

Burning Man is an event that takes place each year an federal land in the dry, lakebed
playa of Nevada's Black Rock Desert. The BLM provides a permit to Burning Man that allowed
for attendance of up to 70,000 participants in 2015. Burning Man is an experiment in
temporary community, and that community is called Black Rock City. The event lasts for eight
days, ending on the first Monday in September (Labor Day).
Black Rock City ~L.C, the organization responsible for organizing the event, is a
subsidiary of the non-profiit Burning Man Project (collectively, "Burning Man"). Tickets are sold
on the Burning Man website, and in 2015, individual tickets ranged in value between $8Q0 and
$390. Vehicle passes are $50 each. The allotment for Vehicle Passes in 2014 was 27,000. In
2014, there were approximately 65,922 participants.
Burning IVlan participants create and share their own experiences and activities
throughout the eight days and nights of the event. A central event is burning "the Man", a
towering wooden effigy, on Saturday night, to which the event owes its name. Burning Man's
personnel light the effigy of the Man and push the switch that ignites the fireworks display.
Burning
Man
coordinates
performance
activities
such
as
the
Fire Conclave (described as "a composition of select fire performance groups from around
the world") and Ambient Drummers ("drummers are organized into groups who rehearse
together before being distributed around the great Circle with the Fire Conclave on the
night of the Burn to fill the air with music."). The Fire Conclave provides "choreographed
fire dances to honor the Klan before it burns on Saturday night, creating the largest gathering
of fire performance in the world." tt://rninarfvt/rt~rforn~l rfornc~a
opportunities/ir~p~rfc~rrr~nt
Additionally, Burning Man books performances for the Center Camp Cafe Performance
Stage. The website states: "The Cafe is seeking acts that can contribute to the Cafe
ambience with performances from opening Monday and throughout the event until Labor
Day. Performers interested in performing in the Cafe should arrange for apre-scheduled
performance time during the event. You can get started by emailing some basic information
to our Cafe Performance booking volunteers
."
tt:/lburnin
n.orq/ever~tJartrfornc/rr nce-rtunitislc~nterPc,,~a-fet

NRS 368A.20p(1)(a) provides:


Except as otherwise provided in this section, there is hereby imposed an
excise tax on admission to any facility in this State where live
entertainment is provided and on the charge for live entertainment
provided by an escort at one or more locations in this State. The rate of
the tax is

Elizabeth B. Stallard
February 2, 2016
Page 3
(a) Except as othenrvise provided in paragraph (b), for admission to a
facility in this State where live entertainment is provided, 9 percent of
the admission charge to the facility.
NRS 368A.20Q(2)(a) excludes from the LET up to 7,500 tickets sold by qualifying non-profit
organizations. Because Burning Man sells far in excess of 7,500 tickets, this exclusion does
not apply.'
Live En#e

ino~tent

A threshold question is whether the activities that take place during the week-long
Burning Man event constitute live entertainment. The statute defines live entertainment as ".. .
any activity provided for pleasure, enjoyment, recreation, relaxation, diversion or other similar
purpose by a person or persons who are physically present when providing that activity to
a patron or group of patrons wha are physically present." NRS 368A.090(1). There is no
question that the large number of patrons who attend Burning Man are physically present
and witnesses to entertainment provided by other person or persons who also are physically
present. There also is no dispute that Burning Man is attended in such large numbers
precisely because it affords the opportunity to witness and participate in a wide variety of
activities provided for pleasure, enjoyment, recreation, relaxation, and diversion.
A significant characteristic of Burning Man is that the entertainment offered is most
often provided by patrons paying to attend the event itself. While the LET recognizes that
such entertainment is in some instances excluded from the definition of live entertainment,
the law specifically includes entertainment provided by patrons as live entertainment where, as
here, the number of tickets offered for sale by anon-profit entity is in excess of 15,000.
NRS 368A.090(3).2 With a permit that allows up to 70,00 attendees and ticket sales
exceeding 60,000 tickets sold, Burning IVlan easily qualifies as an event that provides live
entertainmenfi. Additionally, although some entertainment is provided by patrons, Burning Man
provides entertainment by coordinating performance activities such as the Fire Conclave,
Ambient Drummers, and booking performers for the Center Camp Cafe Performance Stage.3

7 As part of your request, you have asked that the Department opine on how Burning Nian could restructure its operations so as to
avoid or reduce the payment of LET. While the Department does not usually offer an opinion on how a taxpayer may avoid a tax, according to
NRS 368A.200(2)(a), if Burning Man as anon-profit organization sold less than 7,500 tickets to the event, then the LET would not apply.
2 Again in response to the question regarding how Burning Man could be restructured so as to avoid or reduce payment of LET, the
entertainment provided by patrons would not be considered live entertainment if less than 15,000 tickets are sold by anon-profit.
3 Burning of the Man sculpture and the fireworks display constitutes live entertainment as the burning of the Man and setting off of
fireworks are provided by persons that are physically present that set fire to the Man and ignite the fireworks for the pleasure and enjoyment of
those in attendance. Additionally, as noted on your website, the burning of the Man is coupled with performances, coordinated by Burning
Man, by the Fire Conclave and the Ambient Drummers.

Elizabeth B. Stallard
February 2, 2016
Page 4

Another question raised in your request is whether Black Rock City can be considered a
facility for purposes of LET. The definition for facility is included in NRS 368A.060, which
states a facility "means any area or premises, indoor or outdoor, where live entertainment is
provided and for which consideration is collected for the right or privilege of entering, or having
access to, that area or premises."
As noted above, Black Rock City is an area where live entertainment is being provided.
There also is no question that Burning Man collects payment from patrons for the right to enter
Black Rock City during the event. The definition of facility is very broad and includes outdoor
venues and does not include a limitation on the size of the area.

The final question is whether Burning Man is subject to the LET. NRS 368A.110(3)
identifies the taxpayer as follows: "... if live entertainment that is taxable under this chapter is
provided at a publicly owned facility or on public land, [the taxpayer is] the person who collects
the taxable receipts."
Burning Man is an event, on public land, where live entertainment is provided. The
tickets sold for access to the event are subject to the LET and NRS 368A.110(3) identifies the
taxpayer as the person who collects the taxable receipts. In this instance, Burning Man
collects the taxable receipts from the patrons purchasing tickets to the event and is responsible
for paying LET to the Department of Taxation.
Sincerely,

~.~ ~~~,
Deonne E. Contine
Executive Director
Nevada Department of Taxation
cc: Gina C. Session, Chief Attorney General
Encl.: Advisory Opinion Request, December 11, 2015

Elizabeth B. Stallard
February 2, 2016
Page 5
Please be advised that the responses given in this letter are limited to the specific question, transaction,
and fact referred to in your advisory opinion request and subsequent correspondence between
Taxpayer and the Department. This opinion is based upon the representations, documents, facts, and
assumptions that have been included or referenced herein and the assumption that such information is
accurate, true, and authentic. In the event any of the representations, facts, or assumptions are
incorrect, in who% or in part, one or more of the conclusions reached in this opinion might be adversely
affected. You further are advised that subsequent statutory or administrative rule changes or judicial
interpretations of the statutes or rules upon which this advice is based may subject similar, future
transactions to a different treatment than expressed in this reply to your written inquiry. it should be
noted that the conclusions reached in this advisory opinion are not binding on any administrative body
or any court of law, but rather these findings are the Department's interpretation of the applicable
statutes, case iaw, regulations, and other rules.

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FACSIMILE TRANSMISSION

12/111201511:56:28 AM

Date:
To:

Phone

Name

Fax

Patti Zahnter
Nevada De artment of Taxation

775-b842420

From:

Elizabeth B. Stallard

File No.:

44872.00000

Number of Pages, Including Cover:

21

Message:
Please see attached letter.

OR WORK PRODUCT. THE


THE WFORMATION CONTAINED IN THIS FACSIMILE IS Ct7NFIDENTIAL AND MAY ALSO CONTAIN PRMLEGED ATTORNEY-CLIENT WFORMATION
RECIPIENT, OR THE
INFORMATION IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR ENTITY TO WHOM IT IS ADDRESSED. IF YOU ARE NOT THE INTENDED
OR COPYING
EMPLOYEE OR AGENT RESPONSIBLE TO DELIVER IT TO THE INTENDED REgPIENT, YOU ARE HEREBY NOTIFIED THAT ANY USE, DISSEMINATION, DISTRIBUTION
RETURN THE
OF THIS COMMUNICATION IS STRICTLY PROHIBITED. IF YOU HAVE RECEIVED THE FACSIMILE IN ERROR, PLEASE IMMEDIATELY NOTIFY US BY TELEPHONE, AND
OWGINPJ. MESSAGE TO US AT THE ADDRESS ABOVE VIA THE U.S. POSTAL SERVICE. THANK YOU.

IF YQU DO NOT RECEIVE ALL OF THE PAGES, PLEASE PHONE 416.444.1000 AS SOON A$ POSSIBLE.
Downey Brand LLP

621 Capitol MaII, 18th Floor

Sacramento, CA 95814

916.444.1000 Main

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Elizobeth B. Stallord
estaEEcrd@downeybrond.com
916.520.3238 Direct
41 b.520.5b3$ Fax

Fax Server

Downey Brand lLP


100 W. Liberty St., Suite 904
8eno, NV 8950}
775.329.5900 Main
downeybrnnd.com

December 11,2015

VIA FACSIMILE AND U.S. Mac.

Ms. Patti Zahnter


Nevada Department ofTaxation
1550 College Parkway, Suite l IS
parson City, Ne~~ada 8970E-7937
fie:

Live Entertai2unent Tax and Burning iVlarl

Dear mss. Zahnter:


I am outside legal counsel for Black dock City L,LC ("Burning Man"}. I am responding to your
Notice dated October G,20]5, which states that turning Man might now be subject to Nevada's
Live Entertainment Tax("LT")due #o statutory amendments that took effect on October 1,
20I S. Burning Man is sending this letter to the Department ofTaxation (the "D~arhnen#")
mindful ofNevada Taxpayer Bill of Rights section 2,pursuant to which "[t)he L,egislat~ure
has
declared that each taxpayer has the right ... 2[t]o a prompt response front the Department to
each communication from the taxpayer ...[and]8 [t)o obtain specific advice from the
Department concerning takes imposed by the State."
Buttvn~ Man x~quests that tl~e Ilepartment issue a letter concluding that Burning Man is not
subject to the LET,either based on Burni~tg Man's current activities ar with potential changes.
This request is in keeping wit2Z the instruction repeatedly provided during tl~e October 20,201 S,
Workshop on the LET, and reflects the portions of Se+etioii $ ofthe Taxpayer Bill ofRights
stating that "ifthe information you are requesting concerns how the tax is tc~ be collected or
applied, the request should be in writing and should include as much detail as ~ossitale ofthe
specific circumstances" and tizat "[t]he Department's written response can be used to support
the
taxpayer's position should questions arise in an audit."
Burning Man understands that in accordance with Seetian 6 of the Taxpayer Bill of Rights, if the
Depaa~tment makes a determination that the LET applies to Burning Man,the Department rvsll
issae a ilatice ofsuch determination, and tha# Burning Mate may thereafter file a petition with the
Deparhnei~t a:~ part ofexhausting Burning Man's administz~ative remedies. Burtiin~ Man
believes such a p~titian at this point would ~e premature because the Department has not made a
preliminary determination #hat the LET applies to Burni~ig Magi's activities, but only that in its
view,the LET may apply. if Bunting Maas is required to file a petition at flits paint, however,
ptease prt~rnp#ly let me know and outline the procedural requirements to do so.
Id?69i:.5

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Tlais Setter will first pra~Jide details regarding the Burning Man event and the Burning Man.
organization's activities relati~~g to the event.~ The letter will then describe wlty Burning; Man is
not subject to the LET. Finally, and in the event t1~at the Department should preliminarily
ccinclude that Burning Man's current actitirities dc~ ec~nstitute live entertainment for purposes of
the LET, this letter seeks guidance as to whether certain chang$s in Burning 1Vlan's activities
would change the Department's view.
I. Burning Man
Burning Man temporarity uses federal land in the dry lakebed playa ofNevada's $lack Rock
Desert each yeau for the Burning Man event ("event"), subject to a Special Recreatipri Permit
{"permit")issued by the Bureau of Land Management("BLM"). The BLM pc~-mit allowed.
atte~ldance of up try 70,000 participants in 2015. Burning Man is an experiment in temporary
community, and that com;nunity is called Black Tiock City. The event lasts for eight days,
ending on the first Monday in September {Labor Day).
During that period, Burning Man participa~Yts live in Btack Rock City, which functions
prineipatly as a campground for which Burning Man establishes and n~aiiltains certain basic
infrastructure. Pazticipants are responsible for providing virtually everything tI1ey need io
survive the duration oftheir stay in the often harsh conditions ofthe Black Rock Desert,
including their shelter, water, food, and transportation. They construct their own camps, where
they sleep under the stars or in tents, rnc~tor homes, trailers, and other vehicles and temporary
structures. Some camps and villages have selfappointed themes, whip o#tiers have no theme at
a11, but consist ofpeople who simply wish to build and reside in a camp together. This diversity
ofliving accommodations and resident experiences is som~ihin~; Black Rock City has in
common with many large cities.
Consistent with Burning Mail's principles and the req~~irernents ofthe BLM permit, participants
zespect the environment and clean up after themselves, striving t~ leave no physical trace of their
activities behind. Participants interact with other participants by inviting them into their camps
tQ excha~ige ideas and artistic efforts.
As will be discussed in more detail below, one ofthe mast critical facts in analyzing #lie
applicability Qftie LET to the Burning; Man event zs that Burning Man simply provides the
camp~'ound or space in which participants can come together, interchange ideas, and engage in
creative expression. Bunging Man does not provide any form oflive entertainment, and any
interchanges between participants that could even arguably die considered "en#ertainment" are
voluntarily provided only by participants, without control day Burning iV1an at all.
Burni~lg Ma~7 furnishes only the esse2~tia1 infrasttvcture for the event. For example, Burning
Man surveys and lays out Black lock City; sets certain riles far public lieatfh and peace(mostly
1 Burning Man's tax-exempt activities are broader than the Burning h4an event, but this IetEer focuses on dial event.

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relating to safety, automobile use, and care for the environment); helps participants erect largescaleart and sculphues and finds locations within the City to place these sculptures; oversees the
provision of medical services and security services; and interacts with Ic~cal communities and
Ioca1 governin~nts to ensure the efficiency and safety ofingress anci egress ofparticipants.
Burning Man does i~oi, however, pay anyone to provide any sort oflive entertainment as defined
by tine LET,nor does $urning Man curate any such activities.
Exhibit A is a pl~atograph of Black Rock Citythe $ttrt~ing Man event a~ea. Exhibit B is a
graphic depiction. Exhibit C shows the 2415 Burning Man closure area. under the BLM permit.
That closure area exceeded 14,000 acres, about 1 ~% ofthe Black Rock Desert playa area. Black
Rvck City is temporarily fe~xced in a pentago~lal configuration that has a larger footprint than
many pei~nanent cities. T1ie event site is seven square miles, and just the semi-circular camping
area has a width cif approxima#ely two miles across.
Burning Man's "Ten Principles" guide the event's participants. The official Burning ~Vlan
website describes the origin a.nd nature o f these px7iiciples as follows:
Burning Man ca-founder Tarry Harney wrote the Test Principles in 2004 as
guidelines for the newly-formed Regional Network. They were crafted not as a
dictate of hew people should be and act, but as a reflection of filZe community's
ethos ancE culture as it had organically developed since the event's inception.2
The Burning 1~Ian website goes on to describe each principle. All are important, but fcur are
particularly relevant to the LET. One is Radical Self-reliance: `Burning Man eticourages the
individual to discover, exercise and rely on his or her inner resources." Another is Radical Selfexpression, which "arises i`ram tl~e unique lifts of the individual. No one other than the
individual or a collaborating gaup ca;i determine its content. Tt is offered as a gift to others. In
this spirit, doe diver sht~uld respect the rights and liberties ofthe recipient." The thit~d is
Can2munal Effort: `Our community values creative cooperation and colta6orafion. We strive to
produce, prozn~te and protect social networks, public spaces, works ofart, and methods of
c~mmunicatiai~ that. support such interaction." The fourth is Ciii'ting: "Burning Man is devoted
to acts ofgift giving. The value of a ,gift is unconditional. Giftii~~; does not cante~nplate a return
ar an exchange for something ofequal. value."
1n accord r~vitii Connnuna~ 'Effort, participants voluntarily provide services to and engage with
other participants. Far example, many participants volunteer to help other participants arrive, to
work on preparing the City's infrastructure, to help monitor ~31ack Rock. City's perimeter, to
prouide ennergency services and community patrU3s, to help with. the exodus ofparticipants tram

'
"The l0 Priti~ciples of Burning Man," available at[ittp:/Iburningman.orglculture/philosophical-center/10principles.

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D~"NVV f1B E Y B R A N R

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the event site, to help clean tip the site after fhe event, and to help with many other acti~~ities that
su~,part the community of participants in Black Rack City.
Gifting is another key part ofthe culture ofBlack Rock City and dif~ez entiates Bunting Man
fram other events. Within Black Rock City, cominerciai transactions are strictly limited, and
marketing is not allowed. Virtually nothing may be sotd.; Ratiaer, everytliin~; that is exchanged
is driven away freely, as a gift., with iia expectation of any return. In sen~ice to the Gifting
Principle, participants came to Burning Man to share with other participa~~ts: after building their
own camps, participants freety give one another a variety ofservices ar~d activities, inc]uding
lectures, workshops {e.g., hula hoapin~;, meditation, art), yoga classes, food, drinks, shaded tents,
massages, interactive art installations, music, dance spaces, trampolines, and wztty conversation.
Nine of these activities are provided or directed by Burning Mau;they are exclusively wifhin the
purview of the participants.
The non-camping areas contain large and small artistic sculptures built by i~idependent artists,
who are responsible for the fab~-icatio~i, transportation, erection ai d removal oftheir sculptures.
Ft~r some of these sculptures, Burning Man provides grants that cover a portion ofthe total cost;
the artists must provide most oftheir Sounding through independent fundraising and other means.
This section ofBack Rock City fualctior~s as a~a enormous outdoor art museum. Since its
inception, Buinir~g Ma~~ has been a mecca fc~r creators and appreciators ~fcomplex, large-scale
art.
Burning Man. participants live unstructured lives in Blaek Rack City, whether visiting art
installations or other camps, or staying in their owil camps and interacti~zg with participants who
visit them. Many travel an bicycle to explore Black Rock Gity. Same drive highly modified and
artistic "mutant" vei~icles. Aild of course, given tine Burn~ug Man events ei~lit-day duration,
participants must spend significant portions of each day sleeping, preparing personal meals, and
doing chores to maintai~i their camps.
Burning Man does not provida any form of live entertainment fnr event participa~lts tc~ enjoy.
Rather, as discussed above, Auld consistent with Burning Man's Principles, Burning Man
participants create a~ld share their own experiences and. acti~~ities throughout the eight days and
ni~;f~ts ~fthe event. As described on its official website, Bunting Man is not a festival but "a
vibarai~t participatory metropolis generated by its citizens."
The Man sculpture hums on Saturday evening, Burning Man's persai~lei Tight fireworks at the
base of the Man at~d then set fire to the sculpture so that it burns to ashes. Thousands of

3 Tl~e only items sold at the event are ice, which participants may purcha4e at a~~y ofthree "Arctica"
camps placed throughout the city, and a limited selection of ccfffees, teas, and other ncma(co~3olic
t~evera~es, which are availa~ile at the Center Camp Cafe. In addition to the prohibition on any sales,
participants are not allowed to barter; only giftii3g is allowed, ith uo expectation of a return.

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participants leave Black Rock City l~efor~e fhe Man bunts and are not present for any ofthese
activities. Most ~articipa~~ts do not attend the entize eigI~t-day e~~ent.
IT. Nevada's Live Entertainment Tape
A.

Overview ofthe LET.

Nevada Revised Statutes section& 368A.204.1 states that "[except as otherwise provided in this
section, th~r~e is hereby imposed an excise taa~ on admission to any facility in this State where
live ~.ntertainment is provided." Under Section 368A20~.1, the tax rate is "9 percent ofthe
admission charge to the facility.'' Section 368A.020.1 generally defines the "admission charge"
as "the total amount, expressed in terms of money,ofconsideration paid for the right cn privilege
to enter or have access to a facility where Iir~re entertainment is provided." Although an
or~anizatian providing live entertainment is considered the taxpayer far purposes of this tax, tl~e
incid~lts oftaacation fall on the patrons. Section 368A.200.3 states that the fax "must be added
to and collected from the purel~aser at the time of purchase ...."
Section 3G8A.200.4 provides a number of exclusions from the tax for activities that urauld
otherwise constitute "live entertainment" subject to the tax, including interscholastic sporting
events and even I'rrASCAR racing. And section 368A.20Q.4(d}provides that "[a~dtnissian
charges collected and retainet~ by a nonprofit religious, charitable, fraternal or ether organization
that qualifies as atax-exempt organization pursuant t~ 25 U.S.C. 501(c); or by a nonprofit
corporatiol~ ar~aaiized or existing under tl~e provisions of chapter 82 of NRS,are uat taxable
pursuant to this section, only ifthe slumber 4ftickets En the live entertainment u~Ytich are ~ffcred
for sale car other distribution to patrons, either directly or indirectly through a partner,subsidiar}=,
client; affiliate or other coliaboratar, is less than 7,SQ0."
B.

Key Defiiutions.

Statutory definitions are critical in evaluating a statute. The Nevada Snpre~ne Corart considers a
defined statutory term eontrollii~g and will commonly soak to Black's Law Dictionary absent a
statutory defu~tion. See Rugamczs v. EightJudiciall?ist. Court, 305 P.3d 8$7, 893{Nev. 2013).
1.

"Facility"

Section 368A.450.2 defines a "Facility' as "any area or premises, indoor or outdopr, where live
entertaii~nent is provided and fir which consideration is collected far the right or prisTilege of
entering, or having access to, that area or those premises." The statute does not define "area or
premises." "1'he term `premises' is used in common parlance to signify land, with its
appurtenances ...:' Scott, ir. Justic~c's Cvurt ofTahoe To~%nship 435 P.2d 747,748(Nev. I96$)

~ AI I further references to "section" are to the Nevada Revised Statutes unless stated othcrrvise.

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(quoting Black's Law Dictionary 1344,4tli ed.(1951)). having a "premises" defined aG "land"
provides nn guida~lce when activities occur in a large open sp~cc.
2,

"Live Entertairunen#"

Under section 368A.20Q.1, the LET applies"on admission to any facility ... ~~here live
entertainment is provided." And section 36$A.200.3 provides that tax-exempt Organizations are
excluded from the LET "only ifthe number of tickets to the live entertaimnent which are offered
for sale or other distxibuti~n ... is less than 7,500." Thus, the definition of"live entertainment"
~~ides the analysis of whether the tax applies to a given admission charge.
a.

General Definition.

Section ~68A.0~}0 defines "live entertainment" as "any acti~Tity provided for Measure, enjoyment,
recreation, ret~ation, diversion or other similar purpose by a person or persons who are
physically present ~vhei~ providing that activity to a patrons or gaup o~pa~rans who are
physically present." Subsection {2)(a) provides anon-exclusive lisf ofexamples ofIive
entertainment. Subsection (2}(~) provides a list of exclusions from the "live entertainment"
definition.
b.

"Person or Persons."

Section 368A.090 defines "live entertainment" with reference to acti~~ities of a "person or


persons." It does not state whether a person providing t1~e activity is a live person or may also
include entities. Black's Law Dictionary defines n "person" as follor~Ts: "In general usage, a
human being; by statute, however, the term caz~ include firms, labor organizations, partnerships,
associations, corporations, legal representatives, trustees, t~ustees in Bankruptcy, ar receivers."
For example, tnterna2 Revenue Code section 77U1 defines a "person" for mast fedexal income
tax purposes to i~~clude ~1 entity. The LET stn#utes do i~ot define a person to include an entity.
Rather, the statutes' uses of the term "person"----including in the phrases "persons who are nude"
and "person or entity"(in reference to the imposition offines)--contemplate live ~~eopte
providing the "live entertainment." IE2deed, only living persons can provide any activity that is
"dive"; entitzes, by their nature, cannot.
c.

Focus ofthe Activity.

Under section 368A.Q90,"live entertainment" must be an "activity ,provided for pleasu~e,


enjoyment, recreation, relaxation, diversion or other similar purpose ...." A3thougli the statute
does not specify whethez the activi#y is provided for tf~e pleasure ofthe person en~;aginb in the
s It is not clear Burning Man includes "patrons" far live eniertainn~ent ta~c purposes because the statutes do not
specially defile that. terra, and those attending Bu~niiag Man do not f`aIl within the norn~a! defsnition of a "patron" as
defined by Black's Law nictionary: a regu3ar customer o a business.

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activity, or for the pleasure offlee person witnessing the activity, people purchase tickets to
enCertaixunent activities for their own pleasure, and not for the pleasure of the entertainer.
Therefore, the "live entertainment" contemplated by the LET statutes must be an activity
provided for the pleasure ~fthe witness, rattler tI1a~1 tine entertainer.
d,

Exception for Lar~*e-scale Activities Prt~vided by Certaaiz~ NpnProfit Orga~~izations.

Section 368A.090.2(b) provides a list of exclusions from the definition Uflive entertainment,
including "[ejntertairunent provided by a patron or patrons, including, v~~ithout limitation, singing
by patrons or dancing by or between patrons ...." Para~*raph 3 of Section 3G8A.Q90 states an
exception to these exclusions for certain ~~onpro~it activities:
Tl~e exclusions set forth in paragapl~ (b) of subsection. 2 da not apply to an
activity provided by a nonprofit religious, charitable, fraternal or other
organization that qualifes as a talc exempt organization pursuant to 26 U.S.C.
541(c), or by a nonprofit corporation organized or existing under the provisions of
chapter 82 of NRS, when the number of tickets to the activity offered for sale or
other distr~butian is 15,OU0 or more. [Emphasis added.}
This exception has two key cocriponents. First, it applies to an "activity,"6 and that term must be
read iza the co~itex~ ofthe "live enter#ainment" de~nitic~n in Section 368A.090.1 as "any activity
provided for pleasus-e, enjoyment, recreation, relaxation, diversion or other similar purpose by a
persoi~ or persons v~~ho are physically present when providing that activity to a patron or group
of
patrons who are physically present."
Second, the tax-exempt organization must "provide" the live entertaiiunent activity in order for
this exce~tian tt~ apply.
In other wards, atax-exempt organizatio~a can sell tickets that ailc~~t~~ 14,999 patrons to enter a
facility where floe organization is providing live ei~tertaiiune~it, and those pickets will not be
subject to the LET. It is oily ifthe organization sells or distributes 15,000 or more tickets to
allow patrons to enter a facility where the tax-exempt organization is providing the live
entertainment ac#iv ty that the LET would apply.

6 The Department's ()ci:~ber 6,2015 Notice incorrectly stags that ti~is exception to the exclusioa~s applies
to "events." In fact, Section 368A.090 makes n~ reference to "events": by its plaia~ lai~~ua~,e,"[t]he
exclusions ... do nofi apply to an acti~~iiy:' This let#er addresses the statutory language, rail3er il~an the
erroneous language in the Notice.

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II[. Inau~rlicability at'Live Entertainment Tax to Burning Man
Far a number ofreasons, described in detail below, the LET does not apply to Burning Maal's
activities.
A.

Burning Man Dees Nc~t Provide Live Entertainment

None of$urning Man'S activities meet the statutory definition oflive entertainment. Unlike a
concert or perfarrrtance ve~zue, Burning Man has n4 centralized entertainment facilities. Rather,
Black Rock City is a tet~porary campground whose thousands ofresidents are continuously
engaged in all manner of activities, fra~n sleeping, meal preparation, and camp chores to
wnversin~ with their neighbors,interacting with artwork, voluliteerir~g far various infrastructure
departments, anc~ exploring the outer reaches ofthe City.
As described above in SecCion I, Burning Man does not provide any "live entertainment"
activities at t1~e Burning Man event, but is responsible solely for providing; campground
infrastructure and addressing pu~ilic 1lealth, safety, and enviro~~rnental issues. None ofthese
activities are "provided far pleasure, enjoyment, recreation, relaxation, diversion ar oth.er similar
purpose." Section 3fi8A.090.
The activities relating to the bunun~ of the Man sculptu~e do not constitute "live entertaimnent"
either. Vi~hile Burning Man's personnel li~;h# the effigy Qf the Man az~d push the switch that
ignites the fireworks display; participants who choose to witness those events(and rnary do nflt)
are not choosing to watch samt~ne light a fire ~r start the fire~n~c~rks {and indeed, they canna
even.see these individuals); they are there to watch the fire and the frrewarks_ These chemical
reactions are nit "Iive entertainment."
Nar does Burning Man's assistance in placing and installing artistic sculptures constitute tlae
provision of`'live entertainment." Many participants enjoy art ins#allations at Burning Mari, as
that is a care focus of participation in Black. Rock City. But the sculptures and installations are
in place a# the start t~fthe event, and participants are free to interact with them at their leisure. to
this sense, Corning Man functions like a museum or air art gallery. The enjoyment ofsculptural
art installations does not meet Section 36~A.09{?.l's "Ii~re entertainment" definition.
B.

Burnie Man Does Nit Provide Live Eiitertainrnent Tlirou~,h Burning Mari Event
Participants

Even if live eiltertaimnen# did occur beh~een participants at Burning Man,tl~e Burning Man
c~rgaz~iratiort would not be providing any such e~ltertainrnent. As noted above,"en#ertainment
provided by a patron or patrons" is general}y excluded from the LE7'. See section
368A.090.2(b). That exclusion does not apply to "a.~~ actavit~~ provided by a nonprofit
As noted above in fc~c~t~~ote 4, the .LET stai~ites use the terns "activity," aaot tl~e tern "events" that the

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religious, charitable, fraternal ter other organization that qualifies as a tax exempt orgarti7atiozi
pursuant to 2C U.S.C. ~ SOl{c), or by a nonprofit corporation organized or exiting under the
provisions crf chapter 82 ofNRS,when the number oftickets to the activity offered. for sale ar
other distribution is iS,000 or more." Section 368A.Q90(2)(b){emphasis added).
"Provided" is not defined in the LET. T'he American Heritage Dic#ionary defines "provide" as
"to make available; furnish" or "to supply something needed or desired." Therefore, this
exception-ta-tl~e-excluaion~ for nonprofit organira#ions is only trig~,ered ifthe nonprofit
organization is furnishing or supplying the activity.
Because live entertainment requires an "actizlity provided ....lay a person or persons who are
~hysicall}~ present"(sc~e section 358A.090), an orga~zization can only "provide" a five
entertainment activity through live people. For example, an organization could lxire a band tc~
perform a concert or a~1 ac#ing troupe to stage a play. Tl~e organization t~~uld then be providing
taxable live entertainrneni (abs~ixt a~i exemption from the LET). Bunting Man dies i~ot,
however, hire ar otherwise engage any people to provide live entertaitunent activities at the
Burning Man event.
Under certain circumstances, an organization holding an event could act thr~u~lt the event's
attendees, or have the attendees' activities imputed to it. For example, if an arganiz~tion
exercises sufficient control over a ~~oup ofattendees w3~o provide live entertainment to o#her
attendees ofthe event, those attendee-entertainers might be considered the agents ofthe
organization far this pur~~ase. ""T'he rationale far imputing an age~at's acts to the car oration is to
encourage corporate managers to carefully select and monitor those wl~o are acting on the
corporation's behalf." Glenh~-c~ok Capital Ltd P'ship v. Dodds(In rc~ A~zeraco Derivati~~e Ling.),
252 P.3d 681,69S {Nev. 201 l)(citation omitted}. T11us, an or~anizatian providing a five
entertainme2~t activity through participants it controls might be subject to the LET for that
activity(unless it otherwise qualifies for an exemption).
But the requisi#e control and agency do y~ot exist at the Burning Man event. A~ noted above,the
`I'ex~ Pri~ici~les of Burnin,~ Man are expressly intended "not as a dictate of hour people should be
and act, but as a reflection ofthe community's ethos and culture ...:' 'The Principles of Radical
Self-reliance and Radical Setf-expression in particular focus on individuality ra#her tha~l
conformity. Burning Man could not ecmtral, nor does it attempt to control, the i~~ultitude of
activities in which its 70,OOQ participants elect to participate over the duration ofthe Burning
Man event, beyond l~elpin~ to ensure cam~liance with all applicable laws and regulations. Given
Burning Man's demonstrated a~~d purposeful lack of control otijer the activities ofits participants,
I?epartment's Notice errt~ne~usly pled. The Burning Min event is not. itself an "activity" t'or purpcses of
section 36&A.090(2}{b}. Rather, the Burning Man event is comprised of many activities,few of u~I11C~k ~~~
~ro~ided by Bura~in~ Man,and none ofthe Burni~~~; Man-provided activities qualify as "live
entertai~~~nent,"

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there is na rationale fc~r imputing any pariic_ipant behavior that might qualify as "live
entertainment" to Burning A~a~ here.
Thus, as Sunlit~g Man has no role in or contrtil over these patron-provided activities, these are
nc~t "activit[ies] provie~ed by" Burning Man, az~d the exception-to the-exclusions in sectiat~
368A.490(2~(b)dies not apply, and the Burning Man event must be excluded from the LET.
C.

The Burning Matz PJava Is Toc Lame to Bea "Facility."

Under section 3b8A.204.1, the live entertainment #ax applies only "on admission to any facility
... where live entertainment is provided." Section 368A.200.4 provides that the LET does not
apply to "[l]ive entertainment that is provided by or entirely for the benefit of ... atax-exempt
organization," bu# only if the number of tickets "to the live entertainment" is at feast 7,500.
Black Rock. City is larger than many peimmai~enC cities. As ncted above,just the distance from
one end of the camping area to the other is appraximatcly twc~ miles. Tl1e total aria ofBlack
Rock City is seven square miles. To put this nwnber in perspective, Black Rock City is
approximately the size of Ely(7 square miles) az~d larger than Fallen(4 square miles). The
camping area alone is larger than many Nevada cities, iiacludi~g Fa11on and Gerlach {~ square
miles).
The pop~lation of Black Rock City could fit into a large stadium for a sporting event or concert.
In a stadium setting, however, people u~ai~Id presumably be present to watch. an entertairunent
activity, and the stadium would be a "facility" for this purpose. But Black Rock City is by n~o
means a stadium, arena, or similar venue. Even ~flive entertainment as defined by the statute
were found to occur in some discrete portion of Black Rock City, participants r..~uid very
realistically have no idea that such live entertainment is happening, and/or no interest in it.
Given notjust the distance between camps and artworks, birt also the visual and sound harriers
created by tents, vehicles, and various temporary structures, az~y activities perforznec~ in any part
ofthe City at any given time would be completely out of view and earsho# to vast numbers of
participants. Thus, to dean Black Rack City a "facility" for purposes of~the litre entertainment
tax would stretch that definition beyond all reasonable hounds,
Dividing Black Rick City into multiple "facilities," and then taxi~l~; participants on #heir
admission ticket to Black Rock City simply because they have access to each individual facility
at which live e~~#erCaiiunent might be found, would not establish that the ticket is "ta the live
entertainrnenf." Rather, this wa~.~ld produce tl~e same indiscriminate taY effect as rf Black Rock
City were treated as a siil~le facility. it would be the equivalent oftaxing all entrants to an
ezxonnous campground simply because one persa~l might be pla}ping tl~e guitar and singing ~~vithin
view or earshot ofa handful of other pimple within that campground. ~'ertainly the Legislature
did not intend the tax to be applied in this way for it would leave to gi~Te notice of this intent tt~ all
camping facilities that charge an entrance fee ~~i#bin the state).

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D.

AupIication of the LET to Burning Man'Would Necessarily Result in Nan-Urzifonn and


Unequal Tax Treat~~nent.

Article X,section 1 ofthe Nevada CanstitutiUn states in relevant part that "[t]he Legislature shall
pr~~~ide by taw for a aniforni and equal rate of assessment and taxation ...." Even.if taxable Iive
entertainment did t~ccur at places within Black Rack City {again, Burning Man takes the position
that it does not}, treating aII of Black Rock City as a "facility' at ti~hich live entertainment
occurs, and imposing the live entertainment tax. on the entire ticket price, would certainly result
in disparate taxation in violation ~fthe Nevada Canstitation.
First, as explained above, Black Rock City is too large to quatify as a facility under the LET
statutes. 8unling Man participants could not pt~ssibly experience, or even be aware of. the vast
number of activities that take place during their temporary residence in Black. Rock City. Unlike
a live show or sporting event, where a live entertainment activity occurs iii a finite place fc~r a
few hours, the Burning Man event lasts for eight full days and ni~zts, and its tens of thousands of
participants are engaged in a vast array of di#~'erent activities (includin;~ sleeping) at different
times. Thus, even if}ive entertaii7ment as defined by the statute N~er~e found to occur in same
discrete portion ofBlack Rock City, it would necessarily be experienced by different participants
in differe~~t aanounts.
If ~tll Burning Man participants were required to pay the LET on the full cost oftheir adrnissiori
tickets, then despite a uniform ilolninal ta~c rate on the ticket price, participants would be paying
radically different effective tax rates than ox~e another. Participants would alsr~ be paying
radically different effective tax rates than others enjoying live en#ertainment antside af. Burning
Mara.. Such air outcome would not be a uniform and equal. rate of taxation for all parkicipants,
least ofall fir tl~o~e p~xticipants who v~~ould ~~ot witness any oftlse activities that the Depart~ne~i#
might consider "live entertainment"for purposes ofthe LET.
Second, and equally as important, even assumiii~; any live entertaiiunent were to occur at
Burning Man,it would necessarily comprise such a small part of the Bunlinb Man experience
as
to die effectively de minirrais. "[T]he venerable maxim de rr:inimis r~on czsrat lex(`the la~~~ cares
nc~t for trifles') is part of the established background oflegal principles against which all
enactments are adopted, acid which all enactments(absent contrary indication} are Beamed to
accept." Wiscor~srn Dept ofRevenue v. Willrarra Wrigley, Jr., C~., SQS U.S. 214, 231 (1992).
The T~~evada Supreme Court recently app]ied a de. rrzirairnis rule when evaluating tlae
constitutionality ofa delay in a traffic stop, noting that "at invc~ived a de minimis iiitr~sions on
a
dt~iver's liberty" because the "detention was de nainimis ...." State u. Bec~-man, 129 Nev. Adv.
4p.51 (20]3~. If the de minimis rule is applied to limit such important personal liberties and
constitutional rights, it surely applies in the taxation sefting as well. Imposing the LET on the
entire ticket puce to an event v~~ith cue ~niizimrs live entertainment would necessarily be nonunifonn and unequal in violation oftheNevada Constitution.
Finally, applying the LET to Burning Mail r~rould appear to target Burning Mau, an approach
antithetical to u~ifonn and equal rates of taxation. The LET creates exemptions for large events
r ~

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tike cal~ege foc~tbalt games aid NASCAR racing, although football and NASCAR would seem tc~
fall squarely within the definition of"live entertai~~ment." TlZere is ilo valid justification for
exempting these larger events, which tit tlae classic model of the prevision of live entertainment
by the taxpayer, but still attempting to tax Burning Man, which provides na live entertainment at
aIL
The legislative mu~t~tes on the LET statutory amendments cor~finn that the Legislature did not
address the issue o#whether Bun~in~ Mail provided live entertainme~zt..~ This indicates that the
Legislature iziay not have adequately considered the uniform and equal tax treatment
requirements o~'tl~e Nevada constitution.
"l'he LET's pro~~isions concen~ting ~~onprofits would be similar3y prob3ematic i#'the LET were
interpreted as applying; to Bunging Maze, Tt~e revised statutes only impose t21e LET tin a live
entertainment activity provided for the bene#it of a nonprofit organizatiola if chore than 7,500
tickets to the activity are sotd. And while the LET generally exempts patron-provided activities
fiom the "live enteraiimient" definition, that exemption does not apply to activities provided by
nonprofit organizations that sell over l S,t100 tickets. The activities cif for-profit corporations
with patron-provided lire entertainment are exempted from the LET, nc~ matter how many people
are in attendance. As Bur~iing Man is perhaps the only nonprofit organizatao~i in Nevada selling
more than 15,000 tickets to a~i event, these provisions would appear to single out Burning Man
for purpt}ses ofimposing the LET,iii conflict with the Nevada Canstifutic~n's requiremenE that
taxes be uniform and equal.
A state-mandated charge that is denominated a tax. can be deemed a punishment in its substantive
effect. Far example, in Desirnone v. Stag, the Nevada Supreme Curt struck dawn a tax on
narcotics on double jeopardy grounds, stating that "taken as a whale,I~Tevada's tax in practice
and effect is a `concoction' of... `anomalies' and unusual features that(was] ... `too far.
remarTed i~ crucial respects from a standard tax assessment to escape cl~aracterizatian as
punisl~e~it foar the purpose of dcu~le jeopardy analysis."' 996 P.2d 405, 411 (Nev. 2000}
(citing l)epartme~at afRevenase ofMotzt. ~~. Kurth Ranch,51 I U.S. 7b7, 783(1994}). Particularly
in light oftl~e oilier problems r~rith applying the LET to Burning Man,as described above,
imposing the tax an Bun~in~; Man. through a scheme that includes a myriad of exclusions, but
also exceptions to the exclusions directed at But~ung Main, would have the effect of punishing
participants fir clloosi~ig to attend and associate with each other at Burning Man. This is the
very kind of"concoctio~~ full of anomalies and unusual features" that Nevada law and
jurispnadence cacation against. Jd.

x Minutes ofthe Senate Conimitt~e an Revenge ana Economic Development, Seventy-Eighth Session,
M. ay 24, 2015.
"Again, as explained. above, the LET statutes reference "activities," not"events," and ~~o li~~e
entertairunent activities are provided by the Burning Man or~a~~izatio~~ ai the Burning Man event.

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App] in,~ the I.ET to Burnin~Man is Inconsistent with Basic Princ~les of Statutory
Interpretation.

E.

"A fizndamental rule ofstatutory interpretation is that the unreasonableness ofthe result
produced by ane among alternative possible interpretations of a statute is reason for rejecting that
interpretation in favor of another that v~~ould produce a reasonable result." Hughes Properties,
Ir~c. v. State,6$U P.2d 970,971 {Nev. 19$4){citing Shepiffv. Smitdt,91 Nev. 729,733(1975)).
Since applyil~g the LET to Burning Man tickets would result in disparate tax trearinent, as
ex~slained herein, such an interpretatio~z must therefore be rejected as a matter oflaw.
Far all the reasons described above."live entertairunenf' as defined in the LET statutes daes no#
occur at Burning Man, and a~ptying the LET despite a lack oflive entertainnent ox u:~eertaint~
regarding its actuat extent is unreasonable and znconsistent with basic principles oftaxation.
Furthermore, no~l~ing in the Nevada Revised Statutes expressly states that the LET applies to
Burring Man. The Legislature could nat have intended to impose the LET on Buri~ing Man
~ti:ithout first assessing whether Burning Man has live etertaininent, nor could it have intended
to apply a tax to Burning Man that would vic~tate the Nevada Constitution.
To the extent there is airy doubt as to this conclusion, Section 15 ofthe Nevada Ta3cpayer Bill of
Rights states that taxpayers shall have the right "[t]n have statutes imposing taxes and any
regulations adopted pursuant thereto construed in favor of the taxpayer ifthose statutes or
regulations are ofdoubtful validity ar effect, unless there is a specific statutory provision that is
applicable." (Emphases added.) This rule of coizstrucrioi~ is consistent with case taw holding
that "js]tatutes imposing taxes are to be construed in favor ofthe taacpayer and most st~on~ly
against the government and are not tc> be extended by implication beyond tl~e clear meaning of
the laii~uage used." State U, Pioneer Citaze~z :r Bank o,f Nevada,4Sfi P.2d 422,423(Neu. 1~}b9).
Burning Man is challenging the LET's effect as it might he applied t~ Burning Man. If the
I?epartinent has any doubt aboU# whether the LET applies to Burning Main, it must res~lae that
doubt in Burnin,~ Man's favor.
IV. Request for au Upinion Under the Taxpayer Bill of Rights
Finally, as planning for the 2016 Burning Man event has already started, Burning; Man is
exercising i#s right under the ?axpayer Bill of Rights "[t]~ obtain specific advice from the
Department concerning taxes imposed by the State''{~npliasis added}. The purpose ofthis dial
section is to obtain the Department's specific advice with regard to the folIawin~ questions:
1. If the Department believes that either the burning ofthe Man sculpture or the fireworks
display at the base of the Magi sculpture constitutes li<<e entertainment, can the
Department articulate why t~11S SS 50~
2. Does the Deparhnent belie~~e that any of Burning Man's other activities constitute Iive
eY~tertainment? If yes, which activi#ies, and why?

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3. Ifthe Department believes that Burning Man's operation of#hc event as described above
will be subject to the LET in 2016 if its activities remain tl~e same, does the Department
have any advice under the Taacpayer Bill of Rights for the Taxpayer regarding how to
restruc~.~re its c~peratians so as to avoid or reduce any a~iticipated LET?
The October G, 2415 Notice from the Department stated that Burning Man "migh! now meet the
definition of" Live Entertainment and must be registered. for the Nevada Live Entertainment Tax
if[Burning Man]sells tickets for events [sie] that qualify." The Notice also requested that
Burning Man provide infarma#ion on an attached foran. Burning Man i~as no# yet sold tickets to
the 20l b Burning Man event and is therefore not required to register for the LET at this time.
Furthern~ote, Burning Man is entitled to advice from the Department before it registers for this
tax.
For the reasaris enumerated in this letCer, Burning; Man believes the LET does not apply to tickets
to the Burning Man eve~zt. Accordingly, Burning VIan will die delaying ticket sales for the 2016
event while it seeks continuation from the Department.
As you may know,the Burning iUfan event brings in aver $50 million annually to the businesses
and agencies ~f N~rtl~ern Nevada. The fact that the LET's statutory amendments took effect
more than two months ago, but the Department leas still nat finalized the companion re~ulAtions,
is hampering Burning Man's ability to conduct its business in Nevada. We respectfully request
advice can the three questions above as soon as pos~siblc sa t]iat we can plan accordingly. While
we realize it inay be difficult for the vepartment to provide advice an these questions when the
regutati~ns are not yet fizlalizec~, Burning Nlan requests that the Department provide i#s
advice no Later khan January 15,201b. Alease ct~ntact me if this deadline as not feasible sa that
we can work together to find an alternate date.
Thank you fir consit~erin~; this letter. E look foral~zrd to bearing fra~n yc~u sown.
Very truly yours,
DUWN~Y BRAND LLP
/slElizaheth B. Stallard
[Forn~arded witl~~ut signature to avoid delay)
Elizabeth B. Stallard
Enclosures
cc:

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5140 E. Winnemucca Blvd
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Date: fi,ri/2gt5

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