EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. Green numbers along left margin indicate location on the printed bill (e.g., 5-15 indicates page 5, line 15).

1-1 Section 1. Chapter 361 of NRS is hereby amended by adding thereto

1-2 the provisions set forth as sections 2 and 3 of this act.

1-3 Sec. 2. 1. If a taxpayer collects a fee for the exhibition of fine art

1-4 otherwise exempt from taxation pursuant to NRS 361.068, the tax

1-5 otherwise payable for a fiscal year for which the exemption is claimed

1-6 becomes due to the extent of the net revenue derived by the taxpayer for

1-7 that fiscal year.

1-8 2. For the purposes of this section, "net revenue" means the amount

1-9 of the fees collected during that fiscal year less the following paid or

1-10 made during that fiscal year:

1-11 (a) The direct and indirect costs of owning and exhibiting the fine art;

1-12 (b) Contributions by the taxpayer to charitable organizations;

1-13 (c) The cost of educational programs associated with the taxpayer’s

1-14 public display of fine art; and

1-15 (d) Taxes on personal property, other than taxes payable pursuant to

1-16 the provisions of this section, and sales and use taxes, with respect to

1-17 works of fine art.

1-18 3. A tax resulting from the operation of this section is due with the

1-19 tax otherwise due under the taxpayer’s first statement filed pursuant to

1-20 NRS 361.265 after the 15th day of the fourth month after the end of the

2-1 fiscal year in which the net revenue was received or, if no such statement

2-2 is required to be filed, under a statement of the net revenue filed on or

2-3 before the last day of the fourth month after the end of that fiscal year.

2-4 Sec. 3. The exemption provided in paragraph (j) of subsection 1 of

2-5 NRS 361.068 applies to taxes on personal property otherwise due from

2-6 the owner of a work of fine art that is leased to a person who publicly

2-7 displays the work. The price or value to which that section refers is the

2-8 price or value of the work that is leased.

2-9 Sec. 4. NRS 361.068 is hereby amended to read as follows:

2-10 361.068 1. The following personal property is exempt from taxation:

2-43 ensuing fiscal year, meet all the criteria set forth in paragraph (b) of

3-1 subsection 5. If the gallery, museum or other building or area in which

3-2 the fine art will be displayed will not be opened until after the beginning

3-3 of the fiscal year for which the exemption is claimed, the fine art must be

3-4 on display for at least 20 hours per week during at least 35 weeks of the

3-5 first full fiscal year after the date of opening, and the date of opening

3-6 must not be later than 2 years after the purchase of the fine art displayed.

3-7 4. To qualify for the exemption provided in paragraph (k) of

3-8 subsection 1, a taxpayer must donate the property through a foundation or

3-9 organization, not for profit, that accepts such property for use in schools in

3-10 this state. The foundation or organization shall issue a voucher identifying

3-11 each item of property donated. To obtain the benefit of the exemption, the

3-12 taxpayer must apply to the county assessor and tender the voucher. The

3-13 county assessor shall compute the assessed value of the property for the

3-14 year in which the donation was made using the original cost and the year of

3-15 acquisition. The county assessor shall allow a credit of that amount against

3-16 the personal property assessment for the year following the donation.

3-17 5. As used in this section:

3-18 (a) "Boat" includes any vessel or other watercraft, other than a seaplane,

3-19 used or capable of being used as a means of transportation on the water.

3-20 (b) "Fine art for public display" means a work of art which:

3-21 (1) Is an original painting in oil, mineral, water colors, vitreous

3-22 enamel, pastel or other medium, an original mosaic, drawing or sketch, an

3-23 original sculpture of clay, textiles, fiber, wood, metal, plastic, glass or a

3-24 similar material, an original work of mixed media or a lithograph;

3-25 (2) Was purchased in an arm’s length transaction for $25,000 or

3-26 more, or has an appraised value of $25,000 or more;

3-27 (3) Is on public display in a public or private art gallery, museum or

3-28 other building or area in this state for at least 20 hours per week during at

3-29 least 35 weeks of each year for which the exemption is claimed [;] or, if the

3-30 facility displaying the fine art disposes of it before the end of that year,

3-31 during at least two-thirds of the full weeks during which the facility had

3-32 possession of it; and

3-33 (4) Is available for [educational purposes.] group tours by pupils or

3-34 students, during at least 20 days of each full year during which the

3-35 facility in which it is displayed is open, by prior appointment and at

3-36 reasonable times, without charge.

3-37 (c) "Personal property held for sale by a merchant" includes property

3-38 that:

3-39 (1) Meets the requirements of subparagraphs (1) and (2) of

3-40 paragraph (b);

3-41 (2) Is made available for sale within 2 years after it is acquired; and

3-42 (3) Is made available for viewing by the public or prospective

3-43 purchasers, or both, within 2 years after it is acquired, whether or not a

4-1 fee is charged for viewing it and whether or not it is also used for

4-2 purposes other than viewing.

4-3 Sec. 5. NRS 361.068 is hereby amended to read as follows:

4-4 361.068 1. The following personal property is exempt from taxation:

5-1 4. As used in this section:

5-2 (a) "Boat" includes any vessel or other watercraft, other than a seaplane,

5-3 used or capable of being used as a means of transportation on the water.

5-4 (b) "Fine art for public display" means a work of art which:

5-5 (1) Is an original painting in oil, mineral, water colors, vitreous

5-6 enamel, pastel or other medium, an original mosaic, drawing or sketch, an

5-7 original sculpture of clay, textiles, fiber, wood, metal, plastic, glass or a

5-8 similar material, an original work of mixed media or a lithograph;

5-9 (2) Was purchased in an arm’s length transaction for $25,000 or

5-10 more, or has an appraised value of $25,000 or more;

5-11 (3) Is on public display in a public or private art gallery, museum or

5-12 other building or area in this state for at least 20 hours per week during at

5-13 least 35 weeks of each year for which the exemption is claimed [;] or, if the

5-14 facility displaying the fine art disposes of it before the end of that year,

5-15 during at least two-thirds of the full weeks during which the facility had

5-16 possession of it; and

5-17 (4) Is available for [educational purposes.] group tours by pupils or

5-18 students, during at least 20 days of each full year during which the

5-19 facility in which it is displayed is open, by prior appointment and at

5-20 reasonable times, without charge.

5-21 (c) "Personal property held for sale by a merchant" includes property

5-22 that:

5-23 (1) Meets the requirements of subparagraphs (1) and (2) of

5-24 paragraph (b);

5-25 (2) Is made available for sale within 2 years after it is acquired; and

5-26 (3) Is made available for viewing by the public or prospective

5-27 purchasers, or both, within 2 years after it is acquired, whether or not a

5-28 fee is charged for viewing it and whether or not it is also used for

5-29 purposes other than viewing.

5-30 Sec. 6. Chapter 374 of NRS is hereby amended by adding thereto a

5-31 new section to read as follows:

5-32 1. If a taxpayer collects a fee for the exhibition of fine art otherwise

5-33 exempt from taxation on its sale or use pursuant to NRS 374.291, during

5-34 the first full calendar year after its purchase, the tax otherwise payable

5-35 during the year in which it was purchased becomes due to the extent of

5-36 the net revenue derived by the taxpayer for that first full calendar year.

5-37 2. For the purposes of this section, "net revenue" means the amount

5-38 of the fees collected during the calendar year less the following paid or

5-39 made during the calendar year:

5-40 (a) The direct and indirect costs of owning and exhibiting the fine art;

5-41 (b) Contributions by the taxpayer to charitable organizations;

5-42 (c) The cost of educational programs associated with the taxpayer’s

5-43 public display of fine art; and

6-1 (d) Taxes on personal property and sales and use taxes, other than

6-2 taxes payable pursuant to the provisions of this section, with respect to

6-3 works of fine art.

6-4 Sec. 7. NRS 374.055 is hereby amended to read as follows:

6-5 374.055 1. "Retail sale" or "sale at retail" means a sale for any

6-23 purposes other than viewing.

6-24 Sec. 8. NRS 374.080 is hereby amended to read as follows:

6-25 374.080 1. "Storage" includes any keeping or retention in a county

6-37 purposes other than viewing.

6-38 Sec. 9. NRS 374.085 is hereby amended to read as follows:

6-39 374.085 "Storage [" and "use" do] , use or other consumption" does

6-43 outside the state for use thereafter solely outside the state, or for the

7-1 purpose of being processed, fabricated or manufactured into, attached to, or

7-2 incorporated into, other tangible personal property to be transported outside

7-3 the state and thereafter used solely outside the state [.] ; or

7-4 2. The keeping or retention of property that:

7-5 (a) Meets the requirements of paragraphs (a) and (b) of subsection 2

7-6 of NRS 374.291;

7-7 (b) Is made available for sale within 2 years after it is acquired; and

7-8 (c) Is made available for viewing by the public or prospective

7-9 purchasers, or both, within 2 years after it is acquired, whether or not a

7-10 fee is charged for viewing it and whether or not it is also used for

7-11 purposes other than viewing.

7-12 Sec. 10. NRS 374.291 is hereby amended to read as follows:

7-13 374.291 1. [There] Except as otherwise provided in section 3 of this

7-38 reasonable times, without charge.

7-39 Sec. 11. If a facility containing a public or private art gallery, museum

7-40 or other building or area for exhibition was under development or

7-41 construction on July 1, 1997, sections 1 and 2 of chapter 592, Statutes of

7-42 Nevada 1997, at pages 2979 and 2980, apply to works of art purchased

7-43 before that date and displayed in the gallery, museum or other building or

8-1 area within 2 years after their purchase. In that case, the required period of

8-2 display is the later of the year for which the exemption is claimed or the

8-3 first full year after the gallery, museum or other area or building is first

8-4 opened for exhibition, and the affidavit required by section 1 of chapter

8-5 592, Statutes of Nevada 1997, at page 2979, must be filed on or before

8-6 June 15 preceding the applicable year. As used in this section, "year"

8-7 means fiscal year for purposes of section 1 of chapter 592, Statutes of

8-8 Nevada 1997, and calendar year for purposes of section 2 of chapter 592,

8-9 Statutes of Nevada 1997.

8-10 Sec. 12. 1. This section and sections 1 to 4, inclusive, and 6 to 11,

8-11 inclusive, of this act become effective on July 1, 1999, and apply to sales,

8-12 leases, disposition, keeping and retention, and to property held before, on

8-13 or after that date.

8-14 2. Section 4 of this act expires by limitation on June 30, 2003.

8-15 3. Section 5 of this act becomes effective on July 1, 2003.