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 at any time

1-8 the exhibition is open to the public and admission fees are being charged.

1-9 2. Except as otherwise provided in subsection 5, if a taxpayer collects

1-10 a fee for the exhibition of fine art otherwise exempt from taxation

1-11 pursuant to NRS 361.068, the exemption pertaining to that fine art for

1-12 the fiscal year must be reduced by the net revenue derived by the

1-13 taxpayer for that fiscal year. The exemption pertaining to fine art for a

1-14 particular fiscal year must not be reduced below zero, regardless of the

1-15 amount of the net revenue derived by the taxpayer for that fiscal year.

1-16 3. A tax resulting from the operation of this section is due with the

1-17 tax otherwise due under the taxpayer’s first statement filed pursuant to

1-18 NRS 361.265 after the 15th day of the fourth month after the end of the

1-19 fiscal year in which the net revenue was received or, if no such statement

2-1 is required to be filed, under a statement of the net revenue filed on or

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

2-3 4. A taxpayer who is required to pay a tax resulting from the

2-4 operation of this section may receive a credit against the tax for any

2-5 donations made by the taxpayer to the state arts council, the division of

2-6 museums and history dedicated trust fund established pursuant to NRS

2-7 381.0031, a museum that provides exhibits specifically related to nature

2-8 or a museum that provides exhibits specifically related to children, if the

2-9 taxpayer:

2-10 (a) Made the donation before the date that either statement required

2-11 pursuant to subsection 3 is due; and

2-12 (b) Provides to the county assessor documentation of the donation at

2-13 the time that he files the statement required pursuant to subsection 3.

2-14 5. If a taxpayer qualifies for and avails himself of both of the

2-15 exemptions from taxation provided by NRS 361.068 and 374.291, the

2-16 reduction of the exemptions by the net revenue derived by the taxpayer,

2-17 as required pursuant to subsection 2 of this section and subsection 2 of

2-18 section 6 of this act, must be carried out in such a manner that the total

2-19 net revenue derived by the taxpayer is first applied to reduce the

2-20 exemption provided pursuant to NRS 374.291. If the net revenue exceeds

2-21 the amount of the exemption provided pursuant to NRS 374.291, the

2-22 remaining net revenue must be applied to reduce the exemption provided

2-23 pursuant to NRS 361.068. If the net revenue is less than or equal to the

2-24 exemption provided pursuant to NRS 374.291 for that fiscal year, the

2-25 exemption provided pursuant to NRS 361.068 must not be reduced.

2-26 6. For the purposes of this section:

2-27 (a) "Direct costs of owning and exhibiting the fine art" does not

2-28 include any allocation of the general and administrative expense of a

2-29 business or organization that conducts activities in addition to the

2-30 operation of the facility in which the fine art is displayed, including,

2-31 without limitation, an allocation of the salary and benefits of a senior

2-32 executive who is responsible for the oversight of the facility in which the

2-33 fine art is displayed and who has substantial responsibilities related to the

2-34 other activities of the business or organization.

2-35 (b) "Net revenue" means the amount of the fees collected for

2-36 exhibiting the fine art during that fiscal year less the following paid or

2-37 made during that fiscal year:

2-38 (1) The direct costs of owning and exhibiting the fine art; and

2-39 (2) The cost of educational programs associated with the taxpayer’s

2-40 public display of fine art, including the cost of meeting the requirements

2-41 of sub-subparagraph (IV) of subparagraph (1) of paragraph (b) of

2-42 subsection 5 of NRS 361.068.

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

3-2 NRS 361.068 applies to taxes on personal property otherwise due from

3-3 the owner of a work of fine art that is leased to a person who publicly

3-4 displays the work. The price or value to which that section refers is the

3-5 price or value of the work that is leased.

3-6 Sec. 4. NRS 361.068 is hereby amended to read as follows:

3-7 361.068 1. The following personal property is exempt from taxation:

3-42 subsection 5; and

4-1 (b) During any fiscal year in which he claims the exemption, make

4-2 available for educational purposes and not for resale, upon written

4-3 request and without charge to any public school as defined in NRS

4-4 385.007, private school as defined in NRS 394.103 and parent of a child

4-5 who receives instruction in a home pursuant to NRS 392.070, one copy

4-6 of a poster depicting the fine art that the facility has on public display if

4-7 such a poster is available for purchase by the public at the time of the

4-8 request.

4-9 4. To qualify for the exemption provided in paragraph (k) of

4-10 subsection 1, a taxpayer must donate the property through a foundation or

4-11 organization, not for profit, that accepts such property for use in schools in

4-12 this state. The foundation or organization shall issue a voucher identifying

4-13 each item of property donated. To obtain the benefit of the exemption, the

4-14 taxpayer must apply to the county assessor and tender the voucher. The

4-15 county assessor shall compute the assessed value of the property for the

4-16 year in which the donation was made using the original cost and the year of

4-17 acquisition. The county assessor shall allow a credit of that amount against

4-18 the personal property assessment for the year following the donation.

4-19 5. As used in this section:

4-20 (a) "Boat" includes any vessel or other watercraft, other than a seaplane,

4-21 used or capable of being used as a means of transportation on the water.

4-22 (b) "Fine art for public display" :

4-23 (1) Except as otherwise provided in subparagraph (2), means a work

4-24 of art which:

4-25 [(1)] (I) Is an original painting in oil, mineral, water colors, vitreous

4-26 enamel, pastel or other medium, an original mosaic, drawing or sketch, an

4-27 original sculpture of clay, textiles, fiber, wood, metal, plastic, glass or a

4-28 similar material, an original work of mixed media or a lithograph;

4-29 [(2)] (II) Was purchased in an arm’s length transaction for $25,000

4-30 or more, or has an appraised value of $25,000 or more;

4-31 [(3)] (III) Is on public display in a public or private art gallery,

4-32 museum or other building or area in this state for at least 20 hours per week

4-33 during at least 35 weeks of each year for which the exemption is claimed [;]

4-34 or, if the facility displaying the fine art disposes of it before the end of

4-35 that year, during at least two-thirds of the full weeks during which the

4-36 facility had possession of it, or if the gallery, museum or other building

4-37 or area in which the fine art will be displayed will not be opened until

4-38 after the beginning of the fiscal year for which the exemption is claimed,

4-39 these display requirements must instead be met for the first full fiscal

4-40 year after the date of opening, and the date of opening must not be later

4-41 than 2 years after the purchase of the fine art being displayed; and

4-42 [(4)] (IV) Is on display in a facility that is available for [educational

4-43 purposes.] group tours by pupils or students for at least 5 hours on at

5-1 least 60 days of each full year for which the exemption is claimed, during

5-2 which the facility in which it is displayed is open, by prior appointment

5-3 and at reasonable times, without charge; and

5-4 (2) Does not include:

5-5 (I) A work of fine art that is a fixture or an improvement to real

5-6 property;

5-7 (II) A work of fine art that constitutes a copy of an original work

5-8 of fine art, unless the work is a lithograph that is a limited edition and

5-9 that is signed and numbered by the artist;

5-10 (III) Products of filmmaking or photography, including, without

5-11 limitation, motion pictures;

5-12 (IV) Literary works;

5-13 (V) Property used in the performing arts, including, without

5-14 limitation, scenery or props for a stage; or

5-15 (VI) Property that was created for a functional use other than, or

5-16 in addition to, its aesthetic qualities, including, without limitation, a

5-17 classic or custom-built automobile or boat, a sign that advertises a

5-18 business, and custom or antique furniture, lamps, chandeliers, jewelry,

5-19 mirrors, doors or windows.

5-20 (c) "Personal property held for sale by a merchant" includes property

5-21 that:

5-22 (1) Meets the requirements of sub-subparagraphs (I) and (II) of

5-23 subparagraph (1) of paragraph (b);

5-24 (2) Is made available for sale within 2 years after it is acquired; and

5-25 (3) Is made available for viewing by the public or prospective

5-26 purchasers, or both, within 2 years after it is acquired, whether or not a

5-27 fee is charged for viewing it and whether or not it is also used for

5-28 purposes other than viewing.

5-29 (d) "Public display" means the display of a work of fine art where

5-30 members of the public have access to the work of fine art for viewing

5-31 during publicly advertised hours. The term does not include the display

5-32 of a work of fine art in an area where the public does not generally have

5-33 access, including, without limitation, a private office, hallway or meeting

5-34 room of a business, a room of a business used for private lodging and a

5-35 private residence.

5-36 (e) "Pupil" means a person who:

5-37 (1) Is enrolled for the current academic year in a public school as

5-38 defined in NRS 385.007 or a private school as defined in NRS 394.103;

5-39 or

5-40 (2) Receives instruction in a home and is excused from compulsory

5-41 attendance pursuant to NRS 392.070.

5-42 (f) "Student" means a person who is enrolled for the current

5-43 academic year in:

6-1 (1) A community college or university; or

6-2 (2) A licensed postsecondary educational institution as defined in

6-3 NRS 394.099 and a course concerning fine art.

6-4 Sec. 5. NRS 361.068 is hereby amended to read as follows:

6-5 361.068 1. The following personal property is exempt from taxation:

6-43 who receives instruction in a home pursuant to NRS 392.070, one copy

7-1 of a poster depicting the fine art that the facility has on public display if

7-2 such a poster is available for purchase by the public at the time of the

7-3 request.

7-4 4. As used in this section:

7-5 (a) "Boat" includes any vessel or other watercraft, other than a seaplane,

7-6 used or capable of being used as a means of transportation on the water.

7-7 (b) Fine art for public display" :

7-8 (1) Except as otherwise provided in subparagraph (2), means a work

7-9 of art which:

7-10 [(1)] (I) Is an original painting in oil, mineral, water colors, vitreous

7-11 enamel, pastel or other medium, an original mosaic, drawing or sketch, an

7-12 original sculpture of clay, textiles, fiber, wood, metal, plastic, glass or a

7-13 similar material, an original work of mixed media or a lithograph;

7-14 [(2)] (II) Was purchased in an arm’s length transaction for $25,000

7-15 or more, or has an appraised value of $25,000 or more;

7-16 [(3)] (III) Is on public display in a public or private art gallery,

7-17 museum or other building or area in this state for at least 20 hours per week

7-18 during at least 35 weeks of each year for which the exemption is claimed [;]

7-19 or, if the facility displaying the fine art disposes of it before the end of

7-20 that year, during at least two-thirds of the full weeks during which the

7-21 facility had possession of it, or if the gallery, museum or other building

7-22 or area in which the fine art will be displayed will not be opened until

7-23 after the beginning of the fiscal year for which the exemption is claimed,

7-24 these display requirements must be met for the first full fiscal year after

7-25 the date of opening, and the date of opening must not be later than 2

7-26 years after the purchase of the fine art being displayed; and

7-27 [(4)] (IV) Is on display in a facility that is available for [educational

7-28 purposes.] group tours by pupils or students for at least 5 hours on at

7-29 least 60 days of each full year for which the exemption is claimed, during

7-30 which the facility in which it is displayed is open, by prior appointment

7-31 and at reasonable times, without charge; and

7-32 (2) Does not include:

7-33 (I) A work of fine art that is a fixture or an improvement to real

7-34 property;

7-35 (II) A work of fine art that constitutes a copy of an original work

7-36 of fine art, unless the work is a lithograph that is a limited edition and

7-37 that is signed and numbered by the artist;

7-38 (III) Products of filmmaking or photography, including, without

7-39 limitation, motion pictures;

7-40 (IV) Literary works;

7-41 (V) Property used in the performing arts, including, without

7-42 limitation, scenery or props for a stage; or

8-1 (VI) Property that was created for a functional use other than, or

8-2 in addition to, its aesthetic qualities, including, without limitation, a

8-3 classic or custom-built automobile or boat, a sign that advertises a

8-4 business, and custom or antique furniture, lamps, chandeliers, jewelry,

8-5 mirrors, doors or windows.

8-6 (c) "Personal property held for sale by a merchant" includes property

8-7 that:

8-8 (1) Meets the requirements of sub-subparagraphs (I) and (II) of

8-9 subparagraph (1) of paragraph (b);

8-10 (2) Is made available for sale within 2 years after it is acquired; and

8-11 (3) Is made available for viewing by the public or prospective

8-12 purchasers, or both, within 2 years after it is acquired, whether or not a

8-13 fee is charged for viewing it and whether or not it is also used for

8-14 purposes other than viewing.

8-15 (d) "Public display" means the display of a work of fine art where

8-16 members of the public have access to the work of fine art for viewing

8-17 during publicly advertised hours. The term does not include the display

8-18 of a work of fine art in an area where the public does not generally have

8-19 access, including, without limitation, a private office, hallway or meeting

8-20 room of a business, a room of a business used for private lodging and a

8-21 private residence.

8-22 (e) "Pupil" means a person who:

8-23 (1) Is enrolled for the current academic year in a public school as

8-24 defined in NRS 385.007 or a private school as defined in NRS 394.103;

8-25 or

8-26 (2) Receives instruction in a home and is excused from compulsory

8-27 attendance pursuant to NRS 392.070.

8-28 (f) "Student" means a person who is enrolled for the current

8-29 academic year in:

8-30 (1) A community college or university; or

8-31 (2) A licensed postsecondary educational institution as defined in

8-32 NRS 394.099 and a course concerning fine art.

8-33 Sec. 6. Chapter 374 of NRS is hereby amended by adding thereto a

8-34 new section to read as follows:

8-35 1. A taxpayer may collect an admission fee for the exhibition of fine

8-36 art otherwise exempt from taxation on its sale, storage, use or other

8-37 consumption pursuant to NRS 374.291 if the taxpayer offers to residents

8-38 of the State of Nevada a discount of 50 percent from any admission fee

8-39 charged to nonresidents. The discounted admission fee for residents must

8-40 be offered at any time the exhibition is open to the public and admission

8-41 fees are being charged.

8-42 2. If a taxpayer collects a fee for the exhibition of fine art otherwise

8-43 exempt from taxation on its sale, storage, use or other consumption

9-1 pursuant to NRS 374.291 and the fee is collected during the first full

9-2 fiscal year after the purchase of the fine art, the exemption pertaining to

9-3 that fine art must be reduced by the net revenue derived by the taxpayer

9-4 for that first full fiscal year. The exemption pertaining to fine art must

9-5 not be reduced below zero, regardless of the amount of the net revenue

9-6 derived by the taxpayer for that first full fiscal year.

9-7 3. Any tax due pursuant to this section must be paid with the first

9-8 sales and use tax return otherwise required to be filed by the taxpayer

9-9 following the 15th day of the fourth month after the end of the first full

9-10 fiscal year following the purchase of the fine art or, if no sales and use

9-11 tax return is otherwise required to be filed by the taxpayer, with a sales

9-12 and use tax return filed specifically for this purpose on or before the last

9-13 day of the fourth month after the end of the first full fiscal year following

9-14 the purchase of the fine art.

9-15 4. A taxpayer who is required to pay a tax resulting from the

9-16 operation of this section may receive a credit against the tax for any

9-17 donations made by the taxpayer to the state arts council, the division of

9-18 museums and history dedicated trust fund established pursuant to NRS

9-19 381.0031, a museum that provides exhibits specifically related to nature

9-20 or a museum that provides exhibits specifically related to children, if the

9-21 taxpayer:

9-22 (a) Made the donation before the date that either return required

9-23 pursuant to subsection 3 is due; and

9-24 (b) Provides the department documentation of the donation at the time

9-25 that he files the return required pursuant to subsection 3.

9-26 5. For the purposes of this section:

9-27 (a) "Direct costs of owning and exhibiting the fine art" does not

9-28 include any allocation of the general and administrative expense of a

9-29 business or organization that conducts activities in addition to the

9-30 operation of the facility in which the fine art is displayed, including,

9-31 without limitation, an allocation of the salary and benefits of a senior

9-32 executive who is responsible for the oversight of the facility in which the

9-33 fine art is displayed and who has substantial responsibilities related to the

9-34 other activities of the business or organization.

9-35 (b) "Net revenue" means the amount of the fees collected for

9-36 exhibiting the fine art during the fiscal year less the following paid or

9-37 made during the fiscal year:

9-38 (1) The direct costs of owning and exhibiting the fine art; and

9-39 (2) The cost of educational programs associated with the taxpayer’s

9-40 public display of fine art, including the cost of meeting the requirements

9-41 of paragraph (d) of subsection 4 of NRS 374.291.

10-1 Sec. 7. NRS 374.055 is hereby amended to read as follows:

10-2 374.055 1. "Retail sale" or "sale at retail" means a sale for any

10-19 Sec. 8. (Deleted by amendment.)

10-20 Sec. 9. NRS 374.085 is hereby amended to read as follows:

10-21 374.085 "Storage [" and "use" do] , use or other consumption" does

10-37 purposes other than viewing.

10-38 Sec. 10. NRS 374.291 is hereby amended to read as follows:

10-39 374.291 1. [There] Except as otherwise provided in section 6 of this

10-42 county of, works of fine art for public display.

11-1 2. In determining whether a payment made pursuant to a lease of a

11-2 work of fine art is exempt under subsection 1, the value for the purpose

11-3 of paragraph (b) of subsection 4 is the value of the work and not the

11-4 value of possession for the term of the lease, and the year described in

11-5 paragraphs (c) and (d) of subsection 4 is the first full calendar year after

11-6 the payment is made.

11-7 3. During the first full fiscal year following the purchase of fine art

11-8 for which a taxpayer receives the exemption provided in this section,

11-9 make available, upon written request and without charge to any public

11-10 school as defined in NRS 385.007, private school as defined in NRS

11-11 394.103 and parent of a child who receives instruction in a home

11-12 pursuant to NRS 392.070, one copy of a poster depicting the fine art that

11-13 the facility has on public display and that the facility makes available for

11-14 purchase by the public at the time of the request.

11-15 4. As used in this section [, "fine] :

11-16 (a) "Fine art for public display" :

11-17 (1) Except as otherwise provided in subparagraph (2), means a work

11-18 of art which:

11-19 [(a)] (I) Is an original painting in oil, mineral, water colors, vitreous

11-20 enamel, pastel or other medium, an original mosaic, drawing or sketch, an

11-21 original sculpture of clay, textiles, fiber, wood, metal, plastic, glass or a

11-22 similar material, an original work of mixed media or a lithograph;

11-23 [(b)] (II) Is purchased in an arm’s length transaction for $25,000 or

11-24 more, or has an appraised value of $25,000 or more;

11-25 [(c)] (III) Will be on public display in a public or private art gallery,

11-26 museum or other building or area in this state for at least 20 hours per week

11-27 during at least 35 weeks of the first full calendar year after the date on

11-28 which it is purchased [;] , or if the facility displaying the fine art disposes

11-29 of it before the end of that year, during at least two-thirds of the full

11-30 weeks during which the facility had possession of it, or if the gallery,

11-31 museum, or other building or area in which the fine art will be displayed

11-32 will not be opened until after the beginning of the first full calendar year

11-33 after the date on which the fine art is purchased, these display

11-34 requirements must instead be met for the first full fiscal year after the

11-35 date of opening, and the date of opening must not be later than 2 years

11-36 after the purchase of the fine art being displayed; and

11-37 [(d)] (IV) Will be on display in a facility that is available for

11-38 [educational purposes.] group tours by pupils or students for at least 5

11-39 hours on at least 60 days of the first full fiscal year after the purchase of

11-40 the fine art, during which the facility in which it is displayed is open, by

11-41 prior appointment and at reasonable times, without charge; and

11-42 (2) Does not include:

12-1 (I) A work of fine art that is a fixture or an improvement to real

12-2 property;

12-3 (II) Materials purchased by an artist for consumption in the

12-4 production of a work of art that is to be a fixture or an improvement to

12-5 real property;

12-6 (III) A work of fine art that constitutes a copy of an original

12-7 work of fine art, unless the work is a lithograph that is a limited edition

12-8 and that is signed and numbered by the artist;

12-9 (IV) Products of filmmaking or photography, including, without

12-10 limitation, motion pictures;

12-11 (V) Literary works;

12-12 (VI) Property used in the performing arts, including, without

12-13 limitation, scenery or props for a stage; or

12-14 (VII) Property that was created for a functional use other than,

12-15 or in addition to, its aesthetic qualities, including, without limitation, a

12-16 classic or custom-built automobile or boat, a sign that advertises a

12-17 business, and custom or antique furniture, lamps, chandeliers, jewelry,

12-18 mirrors, doors or windows.

12-19 (b) "Public display" means the display of a work of fine art where

12-20 members of the public have access to the work of fine art for viewing

12-21 during publicly advertised hours. The term does not include the display

12-22 of a work of fine art in an area where the public does not generally have

12-23 access, including, without limitation, a private office, hallway or meeting

12-24 room of a business, a room of a business used for private lodging and a

12-25 private residence.

12-26 (c) "Pupil" means a person who:

12-27 (1) Is enrolled for the current academic year in a public school as

12-28 defined in NRS 385.007 or a private school as defined in NRS 394.103;

12-29 or

12-30 (2) Receives instruction in a home and is excused from compulsory

12-31 attendance pursuant to NRS 392.070.

12-32 (d) "Student" means a person who is enrolled for the current

12-33 academic year in:

12-34 (1) A community college or university; or

12-35 (2) A licensed postsecondary educational institution as defined in

12-36 NRS 394.099 and a course concerning fine art.

12-37 Sec. 11. If a facility containing a public or private art gallery, museum

12-38 or other building or area for exhibition was under development or

12-39 construction on July 1, 1997, sections 1 and 2 of chapter 592, Statutes of

12-40 Nevada 1997, at pages 2979 and 2980, apply to works of art purchased

12-41 before that date and displayed in the gallery, museum or other building or

12-42 area within 2 years after their purchase. In that case, the required period of

12-43 display is the later of the year for which the exemption is claimed or the

13-1 first full year after the gallery, museum or other area or building is first

13-2 opened for exhibition, and the affidavit required by section 1 of chapter

13-3 592, Statutes of Nevada 1997, at page 2979, must be filed on or before

13-4 June 15 preceding the applicable year. As used in this section, "year"

13-5 means fiscal year for purposes of section 1 of chapter 592, Statutes of

13-6 Nevada 1997, and calendar year for purposes of section 2 of chapter 592,

13-7 Statutes of Nevada 1997.

13-8 Sec. 12. 1. This section and sections 1 to 4, inclusive, and 6 to 11,

13-9 inclusive, of this act become effective on July 1, 1999, and apply to sales,

13-10 leases, dispositions, keeping and retention of property, and to property

13-11 held, before, on or after that date except that the provisions of subsection 1

13-12 of sections 2 and 6 of this act do not apply to require the taxpayer to have

13-13 offered discounted admission fees for residents before July 1, 1999.

13-14 2. Section 4 of this act expires by limitation on June 30, 2003.

13-15 3. Section 5 of this act becomes effective on July 1, 2003.