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. A taxpayer may collect an admission fee for the

1-4 exhibition of fine art otherwise exempt from taxation pursuant to NRS

1-5 361.068 if the taxpayer offers to residents of the State of Nevada a

1-6 discount of 50 percent from any admission fee charged to nonresidents.

1-7 The discounted admission fee for residents must be offered for a total of

1-8 at least 25 hours each week between 6 p.m. and 12 a.m. during the year

1-9 for which the exemption is claimed.

1-10 2. If a taxpayer collects a fee for the exhibition of fine art otherwise

1-11 exempt from taxation pursuant to NRS 361.068, the tax otherwise

1-12 payable for a fiscal year for which the exemption is claimed becomes due

1-13 to the extent of the net revenue derived by the taxpayer for that fiscal

1-14 year.

1-15 3. For the purposes of this section, "net revenue" means the amount

1-16 of the fees collected for exhibiting the fine art during that fiscal year less

1-17 the following paid or made during that fiscal year:

1-18 (a) The direct costs of owning and exhibiting the fine art;

1-19 (b) Contributions by the taxpayer to supervised programs for the arts

1-20 as provided in NRS 62.211 and charitable organizations;

2-1 (c) The cost of educational programs associated with the taxpayer’s

2-2 public display of fine art, including the cost of meeting the requirements

2-3 of subparagraph (4) of paragraph (b) of subsection 5 of NRS 361.068;

2-4 and

2-5 (d) Taxes on personal property, other than taxes payable pursuant to

2-6 the provisions of this section, and sales and use taxes, with respect to

2-7 works of fine art.

2-8 4. A tax resulting from the operation of this section is due with the

2-9 tax otherwise due under the taxpayer’s first statement filed pursuant to

2-10 NRS 361.265 after the 15th day of the fourth month after the end of the

2-11 fiscal year in which the net revenue was received or, if no such statement

2-12 is required to be filed, under a statement of the net revenue filed on or

2-13 before the last day of the fourth month after the end of that fiscal year.

2-14 Sec. 3. The exemption provided in paragraph (j) of subsection 1 of

2-15 NRS 361.068 applies to taxes on personal property otherwise due from

2-16 the owner of a work of fine art that is leased to a person who publicly

2-17 displays the work. The price or value to which that section refers is the

2-18 price or value of the work that is leased.

2-19 Sec. 4. NRS 361.068 is hereby amended to read as follows:

2-20 361.068 1. The following personal property is exempt from taxation:

2-43 applicability of the exemption.

3-1 3. A person claiming the exemption provided for in paragraph (j) of

3-2 subsection 1 shall, on or before June 15 for the next ensuing fiscal year, file

3-3 with the county assessor an affidavit declaring that the fine art [:

3-4 (a) Was purchased in an arm’s length transaction for $25,000 or more,

3-5 or has an appraised value of $25,000 or more;

3-6 (b) Will be on public display in a public or private art gallery, museum

3-7 or other building or area in this state for at least 20 hours per week during

3-8 at least 35 weeks of the year for which the exemption is claimed; and

3-9 (c) Will be available for educational purposes.] will, during that

3-10 ensuing fiscal year, meet all the criteria set forth in paragraph (b) of

3-11 subsection 5.

3-12 4. To qualify for the exemption provided in paragraph (k) of

3-13 subsection 1, a taxpayer must donate the property through a foundation or

3-14 organization, not for profit, that accepts such property for use in schools in

3-15 this state. The foundation or organization shall issue a voucher identifying

3-16 each item of property donated. To obtain the benefit of the exemption, the

3-17 taxpayer must apply to the county assessor and tender the voucher. The

3-18 county assessor shall compute the assessed value of the property for the

3-19 year in which the donation was made using the original cost and the year of

3-20 acquisition. The county assessor shall allow a credit of that amount against

3-21 the personal property assessment for the year following the donation.

3-22 5. As used in this section:

3-23 (a) "Boat" includes any vessel or other watercraft, other than a seaplane,

3-24 used or capable of being used as a means of transportation on the water.

3-25 (b) "Fine art for public display" means a work of art which:

3-26 (1) Is an original painting in oil, mineral, water colors, vitreous

3-27 enamel, pastel or other medium, an original mosaic, drawing or sketch, an

3-28 original sculpture of clay, textiles, fiber, wood, metal, plastic, glass or a

3-29 similar material, an original work of mixed media or a lithograph;

3-30 (2) Was purchased in an arm’s length transaction for $25,000 or

3-31 more, or has an appraised value of $25,000 or more;

3-32 (3) Is on public display in a public or private art gallery, museum or

3-33 other building or area in this state for at least 20 hours per week during at

3-34 least 35 weeks of each year for which the exemption is claimed [;] or, if the

3-35 facility displaying the fine art disposes of it before the end of that year,

3-36 during at least two-thirds of the full weeks during which the facility had

3-37 possession of it, or if the gallery, museum or other building or area in

3-38 which the fine art will be displayed will not be opened until after the

3-39 beginning of the fiscal year for which the exemption is claimed, these

3-40 display requirements must instead be met for the first full fiscal year

3-41 after the date of opening, and the date of opening must not be later than

3-42 2 years after the purchase of the fine art being displayed; and

4-1 (4) Is on display in a facility that is available for [educational

4-2 purposes.] group tours by pupils or students for at least 5 hours on at

4-3 least 20 days of each full year for which the exemption is claimed, during

4-4 which the facility in which it is displayed is open, by prior appointment

4-5 and at reasonable times, without charge.

4-6 (c) "Personal property held for sale by a merchant" includes property

4-7 that:

4-8 (1) Meets the requirements of subparagraphs (1) and (2) of

4-9 paragraph (b);

4-10 (2) Is made available for sale within 2 years after it is acquired; and

4-11 (3) Is made available for viewing by the public or prospective

4-12 purchasers, or both, within 2 years after it is acquired, whether or not a

4-13 fee is charged for viewing it and whether or not it is also used for

4-14 purposes other than viewing.

4-15 Sec. 5. NRS 361.068 is hereby amended to read as follows:

4-16 361.068 1. The following personal property is exempt from taxation:

4-42 or has an appraised value of $25,000 or more;

5-1 (b) Will be on public display in a public or private art gallery, museum

5-2 or other building or area in this state for at least 20 hours per week during

5-3 at least 35 weeks of the year for which the exemption is claimed; and

5-4 (c) Will be available for educational purposes.] will, during that

5-5 ensuing fiscal year, meet all the criteria set forth in paragraph (b) of

5-6 subsection 4.

5-7 4. As used in this section:

5-8 (a) "Boat" includes any vessel or other watercraft, other than a seaplane,

5-9 used or capable of being used as a means of transportation on the water.

5-10 (b) "Fine art for public display" means a work of art which:

5-11 (1) Is an original painting in oil, mineral, water colors, vitreous

5-12 enamel, pastel or other medium, an original mosaic, drawing or sketch, an

5-13 original sculpture of clay, textiles, fiber, wood, metal, plastic, glass or a

5-14 similar material, an original work of mixed media or a lithograph;

5-15 (2) Was purchased in an arm’s length transaction for $25,000 or

5-16 more, or has an appraised value of $25,000 or more;

5-17 (3) Is on public display in a public or private art gallery, museum or

5-18 other building or area in this state for at least 20 hours per week during at

5-19 least 35 weeks of each year for which the exemption is claimed [;] or, if the

5-20 facility displaying the fine art disposes of it before the end of that year,

5-21 during at least two-thirds of the full weeks during which the facility had

5-22 possession of it, or if the gallery, museum or other building or area in

5-23 which the fine art will be displayed will not be opened until after the

5-24 beginning of the fiscal year for which the exemption is claimed, these

5-25 display requirements must be met for the first full fiscal year after the

5-26 date of opening, and the date of opening must not be later than 2 years

5-27 after the purchase of the fine art being displayed; and

5-28 (4) Is on display in a facility that is available for [educational

5-29 purposes.] group tours by pupils or students for at least 5 hours on at

5-30 least 20 days of each full year for which the exemption is claimed, during

5-31 which the facility in which it is displayed is open, by prior appointment

5-32 and at reasonable times, without charge.

5-33 (c) "Personal property held for sale by a merchant" includes property

5-34 that:

5-35 (1) Meets the requirements of subparagraphs (1) and (2) of

5-36 paragraph (b);

5-37 (2) Is made available for sale within 2 years after it is acquired; and

5-38 (3) Is made available for viewing by the public or prospective

5-39 purchasers, or both, within 2 years after it is acquired, whether or not a

5-40 fee is charged for viewing it and whether or not it is also used for

5-41 purposes other than viewing.

6-1 Sec. 6. Chapter 374 of NRS is hereby amended by adding thereto a

6-2 new section to read as follows:

6-3 1. A taxpayer may collect an admission fee for the exhibition of fine

6-4 art otherwise exempt from taxation on its sale, storage, use or other

6-5 consumption pursuant to NRS 374.291 if the taxpayer offers to residents

6-6 of the State of Nevada a discount of 50 percent from any admission fee

6-7 charged to nonresidents. The discounted admission fee for residents must

6-8 be offered for a total of at least 25 hours each week between 6 p.m. and

6-9 12 a.m. during the first full calendar year after the purchase of the fine

6-10 art.

6-11 2. If a taxpayer collects a fee for the exhibition of fine art otherwise

6-12 exempt from taxation on its sale, storage, use or other consumption

6-13 pursuant to NRS 374.291 and the fee is collected during the first full

6-14 calendar year after the purchase of the fine art, the tax otherwise payable

6-15 during the year in which it was purchased or upon the sale or use of the

6-16 fine art becomes due to the extent of the net revenue derived by the

6-17 taxpayer for that first full calendar year.

6-18 3. Any tax due pursuant to this section must be paid with the first

6-19 sales and use tax return otherwise required to be filed by the taxpayer

6-20 following the 15th day of the fourth month after the end of the first full

6-21 calendar year following the purchase of the fine art or, if no sales and

6-22 use tax return is otherwise required to be filed by the taxpayer, with a

6-23 sales and use tax return filed specifically for this purpose on or before

6-24 the last day of the fourth month after the end of the first full calendar

6-25 year following the purchase of the fine art.

6-26 4. For the purposes of this section, "net revenue" means the amount

6-27 of the fees collected for exhibiting the fine art during the calendar year

6-28 less the following paid or made during the calendar year:

6-29 (a) The direct costs of owning and exhibiting the fine art;

6-30 (b) Contributions by the taxpayer to supervised programs for the arts

6-31 as provided in NRS 62.211 and charitable organizations;

6-32 (c) The cost of educational programs associated with the taxpayer’s

6-33 public display of fine art, including the cost of meeting the requirements

6-34 of paragraph (d) of subsection 3 of NRS 374.291; and

6-35 (d) Taxes on personal property and sales and use taxes, other than

6-36 taxes payable pursuant to the provisions of this section, with respect to

6-37 works of fine art.

6-38 Sec. 7. NRS 374.055 is hereby amended to read as follows:

6-39 374.055 1. "Retail sale" or "sale at retail" means a sale for any

7-1 (a) Meets the requirements of paragraphs (a) and (b) of subsection 3

7-2 of NRS 374.291;

7-3 (b) Is made available for sale within 2 years after it is acquired; and

7-4 (c) Is made available for viewing by the public or prospective

7-5 purchasers, or both, within 2 years after it is acquired, whether or not a

7-6 fee is charged for viewing it and whether or not it is also used for

7-7 purposes other than viewing.

7-8 2. The delivery in a county of tangible personal property by an owner

7-9 or former owner thereof or by a factor, or agent of such owner, former

7-10 owner or factor, if the delivery is to a consumer or person for redelivery to

7-11 a consumer, pursuant to a retail sale made by a retailer not engaged in

7-12 business in the county, is a retail sale in the county by the person making

7-13 the delivery. He shall include the retail selling price of the property in his

7-14 gross receipts.

7-15 Sec. 8. (Deleted by amendment.)

7-16 Sec. 9. NRS 374.085 is hereby amended to read as follows:

7-17 374.085 "Storage [" and "use" do] , use or other consumption" does

7-33 purposes other than viewing.

7-34 Sec. 10. NRS 374.291 is hereby amended to read as follows:

7-35 374.291 1. [There] Except as otherwise provided in section 6 of this

7-40 work of fine art is exempt under subsection 1, the value for the purpose

8-1 of paragraph (b) of subsection 3 is the value of the work and not the

8-2 value of possession for the term of the lease, and the year described in

8-3 paragraph (c) of subsection 3 is the first full calendar year after the

8-4 payment is made.

8-5 3. As used in this section, "fine art for public display" means a work of

8-6 art which:

8-7 (a) Is an original painting in oil, mineral, water colors, vitreous enamel,

8-8 pastel or other medium, an original mosaic, drawing or sketch, an original

8-9 sculpture of clay, textiles, fiber, wood, metal, plastic, glass or a similar

8-10 material, an original work of mixed media or a lithograph;

8-11 (b) Is purchased in an arm’s length transaction for $25,000 or more, or

8-12 has an appraised value of $25,000 or more;

8-13 (c) Will be on public display in a public or private art gallery, museum

8-14 or other building or area in this state for at least 20 hours per week during

8-15 at least 35 weeks of the first full calendar year after the date on which it is

8-16 purchased [;] , or if the facility displaying the fine art disposes of it before

8-17 the end of that year, during at least two-thirds of the full weeks during

8-18 which the facility had possession of it, or if the gallery, museum, or other

8-19 building or area in which the fine art will be displayed will not be opened

8-20 until after the beginning of the first full calendar year after the date on

8-21 which the fine art is purchased, these display requirements must instead

8-22 be met for the first full calendar year after the date of opening, and the

8-23 date of opening must not be later than 2 years after the purchase of the

8-24 fine art being displayed; and

8-25 (d) Will be on display in a facility that is available for [educational

8-26 purposes.] group tours by pupils or students for at least 5 hours on at

8-27 least 20 days of the first full calendar year after the purchase of the fine

8-28 art, during which the facility in which it is displayed is open, by prior

8-29 appointment and at reasonable times, without charge.

8-30 Sec. 11. If a facility containing a public or private art gallery, museum

8-31 or other building or area for exhibition was under development or

8-32 construction on July 1, 1997, sections 1 and 2 of chapter 592, Statutes of

8-33 Nevada 1997, at pages 2979 and 2980, apply to works of art purchased

8-34 before that date and displayed in the gallery, museum or other building or

8-35 area within 2 years after their purchase. In that case, the required period of

8-36 display is the later of the year for which the exemption is claimed or the

8-37 first full year after the gallery, museum or other area or building is first

8-38 opened for exhibition, and the affidavit required by section 1 of chapter

8-39 592, Statutes of Nevada 1997, at page 2979, must be filed on or before

8-40 June 15 preceding the applicable year. As used in this section, "year"

8-41 means fiscal year for purposes of section 1 of chapter 592, Statutes of

8-42 Nevada 1997, and calendar year for purposes of section 2 of chapter 592,

8-43 Statutes of Nevada 1997.

9-1 Sec. 12. 1. This section and sections 1 to 4, inclusive, and 6 to 11,

9-2 inclusive, of this act become effective on July 1, 1999, and apply to sales,

9-3 leases, dispositions, keeping and retention of property, and to property

9-4 held, before, on or after that date except that the provisions of subsection 1

9-5 of sections 2 and 6 of this act do not apply to require the taxpayer to have

9-6 offered discounted admission fees for residents before July 1, 1999.

9-7 2. Section 4 of this act expires by limitation on June 30, 2003.

9-8 3. Section 5 of this act becomes effective on July 1, 2003.