SUMMARY--Provides exemption from certain sales and use taxes and property tax for certain works of art. (BDR 32-1720)
FISCAL NOTE: Effect on Local Government: Yes.
Effect on the State or on Industrial Insurance: Yes.
EXPLANATION - Matter in italics is new; matter in brackets [ ] is material to be omitted.
AN ACT relating to taxation; providing an exemption from certain sales and use taxes and from the ad valorem tax on personal property for certain works of art; and providing other matters properly relating thereto.
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Section 1 NRS 361.068 is hereby amended to read as follows:
361.0681. The following personal property is exempt from taxation:
(a) Personal property held for sale by a merchant;
(b) Personal property held for sale by a manufacturer;
(c) Raw materials and components held by a manufacturer for manufacture into products, and supplies to be consumed in the process of manufacture;
(d) Tangible personal property purchased by a business which will be consumed during the operation of the business;
(e) Livestock;
(f) Colonies of bees;
(g) Pipe and other agricultural equipment used to convey water for the irrigation of legal crops;
(h) All boats;
(i) Slide-in campers and camper shells; [and]
(j) Computers and related equipment donated for use in schools in this state [.] ;
(k) Fine art for public display; and
(l) A work of art that:
(1) Was purchased at an arm's length transaction for $250 or more, or has an appraised value of $250 or more; and
(2) Was created by an artist who is a resident of this state.
2. The Nevada tax commission may exempt from taxation that personal property for which the annual taxes would be less than the cost of collecting those taxes. If such an exemption is provided, the Nevada tax commission shall annually determine the average cost of collecting property taxes in this state which must be used in determining the applicability of the exemption.
3. A person claiming the exemption provided for in paragraph (k) of subsection 1 shall, on or before June 15 for the next ensuing fiscal year, file with the county assessor an affidavit declaring that the fine art:
(a) Was purchased in an arm's length transaction for $25,000 or more, or has an appraised value of $25,000 or more;
(b) Will be on public display in a public or private art gallery, museum or other building or area in this state for at least 20 hours per week during at least 35 weeks of the year for which the exemption is claimed; and
(c) Will be available for educational purposes.
4. A person claiming the exemption provided for in paragraph (l) of subsection 1 shall file a copy of the certification of the artist with the county assessor.
5. As used in this section [, "boat"] :
(a) "Boat" includes any vessel or other watercraft, other than a seaplane, used or capable of being used as a means of transportation on the water.
(b) "Fine art for public display" means a work of art which:
(1) Is an original painting in oil, mineral, water colors, vitreous enamel, pastel or other medium, an original mosaic, drawing or sketch, an original sculpture of clay, textiles, fiber, wood, metal, plastic, glass or a similar material, an original work of mixed media or a lithograph;
(2) Was purchased in an arm's length transaction for $25,000 or more, or has an appraised value of $25,000 or more;
(3) Is on public display in a public or private art gallery, museum or other building or area in this state for at least 20 hours per week during at least 35 weeks of each year for which the exemption is claimed; and
(4) Is available for educational purposes.
Sec. 2. Chapter 374 of NRS is hereby amended by adding thereto the provisions set forth as sections 3 and 4 of this act.
Sec. 3. 1. There are exempted from the taxes imposed by this chapter the gross receipts from the sales of, and the storage, use or other consumption in a county of, works of fine art for public display.
2. As used in this section, "fine art for public display" means a work of art which:
(a) Is an original painting in oil, mineral, water colors, vitreous enamel, pastel or other medium, an original mosaic, drawing or sketch, an original sculpture of clay, textiles, fiber, wood, metal, plastic, glass or a similar material, an original work of mixed media or a lithograph;
(b) Is purchased in an arm's length transaction for $25,000 or more, or has an appraised value of $25,000 or more;
(c) Will be on public display in a public or private art gallery, museum or other building or area in this state for at least 20 hours per week during at least 35 weeks of the first full calendar year after the date on which it is purchased; and
(d) Will be available for educational purposes.
Sec. 4. There are exempted from the taxes imposed by this chapter the gross receipts from the sales of, and the storage, use or other consumption in a county of, works of art that:
1. Are purchased at an arm's length transaction for $250 or more, or have an appraised value of $250 or more; and
2. Are created by an artist who is a resident of this state.
Sec. 5. 1. This section and sections 2, 3 and 4 of this act become effective on July 1, 1997.
2. Section 1 of this act becomes effective at 12:02 a.m. on July 1, 1997.