Insomniac Shows its Strength and Money, Fights Against Tax at Public Hearing

The first public meeting was held on Tuesday in Las Vegas about the Live Entertainment Tax and Insomniac brought out the big numbers in opposition of it. There are a number of events exempt from the tax, including Electric Daisy Carnival and they’re all fighting it. It’s something that will have an impact on customers because the tax would be levied on the ticket or the admission. It would be collected by the business but paid by the fans. The simple term is that ticket prices will go up.

This was first mentioned towards the end of April when headlines everywhere stated that EDC 2014 was in jeopardy.

One may think, how can Insomniac battle against this tax like they are? Simple answer: the weekend of EDC has the highest weekend occupancy rates of the year in Las Vegas hotels. No other event fills hotels like ravers from around the world do as they descend upon Las Vegas. That’s an impressive number. Insomniac did not guarantee a future either stating, “it’s unlikely to be the kind of event held in perpetuity.” Read through for more on that.

Insomniac was not the only company to dispute this tax at first public hearings. The Las Vegas Motor Speedway stated their case about events that are exempt. The Reno Rodeo Association and Reno Rodeo Foundation presented proposed amendment about the LET and status of a tax exemption as a non profit. Life is Beautiful Festival, the Motion Picture Association and others as well had information present to be against the tax. Sadly though there was only two emails disagreeing with the tax. This is where we all come in to play and will need to voice our concerns.

In some slideshow presentations Insomniac called the new admissions tax bad for music fans and the state of Nevada. One of the points below mentions that large outdoor venues are desperate for large outdoor events and they’ll have choices to take the event elsewhere.

Would the state call their bluff? It’ll be interesting. The numbers provided by Insomniac are amazing based on how much money all of the “headliners” spend when in Las Vegas for the event.

Here’s the key points that were in the slideshow:

ECONOMIC IMPACT ON LAS VEGAS & NEVADA:

Impact on Clark County:

• 2012 :: $207,048,000
• 2011 :: $136,403,000

Impact on Nevada:

• 2012 :: $207,516,000
• 2011 :: $136,729,000

Jobs created:

• 2012 :: 2,018
• 2011 :: 1,400

Residence of EDC 2012 Attendees:

• 59.9% California
• 34.1% Other States or Countries
• 6% Nevada

Total Direct Expenditures:

• $90.0 MILLION by Non-Locals
• $22.56 MILLION by Insomniac
• $2.78 MILLION by Locals

Average Daily Spending Per Person:

• $334 Non-Locals ($63.52 transportation, $25.42 retail, $34.16 entertainment, $55.84 gambling, $62.20 food, $92.88 accommodations)
• $252.60 Locals ($55.90 transportation, $24.84 retail, $22.2o entertainment, $36.71 gambling, $66.70 food, $46.24 accommodations)

TOTAL IMPACT TO DATE: $344,246,000

ECONOMIC DEVELOPMENT

The goal for Assembly Speaker Marilyn Kirkpatrick, D-North Las Vegas, is to take away the exemptions and generate more money and everyone else says do that and we’ll threaten to take business elsewhere. Do companies making millions of dollars deserve exemptions? That’s a great topic that will be debated forever.

Frequently Asked Questions Regarding the Electric Daisy Carnival (EDC) and the Live Entertainment Tax (LET)

Is EDC exempt from the LET because the event is held at the Las Vegas Motor Speedway?

No. The Las Vegas Motor Speedway is not exempt from the LET. The NASCAR race is exempt in one section of the law, and EDC is exempt under a different section for “outdoor concerts.”

If you remove the exemption from the LET, will the artists and promoters of EDC start paying taxes?

No. The LET is a tax that is levied on the ticket or the admission. Very similar to sales tax, it is COLLECTED by the business, but it is PAID by the fans. EDC wants to keep tickets affordable. The unique fan base of EDC is willing to travel. Simple economics and elasticity of demand dictate that any promoter will seek a venue where they can sell the most tickets.

Does the EDC get $1 million per year from the Las Vegas Convention and Visitors Authority or Las Vegas Events? No. The EDC has contracted with Las Vegas Events to help promote many of the attractions Las Vegas has to offer in conjunction with EDC. The amount is $250,000 annually. None of the money has been received.

What is the status of the EDC? Will there be another event?

EDC is a music festival, like Woodstock. There is a unique fan base that enjoys this kind of entertainment. Like Woodstock, it’s unlikely to be the kind of event held in perpetuity. Promoters of music festivals are seeking to promote events that satisfy the demand these fans have now. So many different factors enter into the decision to produce an event and the competitive environment is fierce. Southern Nevada benefits a great deal from these kinds of festivals and hopefully, will remain a competitive venue so long as there is demand to attend them.

Does EDC cost taxpayer to produce by using police, fire, and emergency services.

No. All police, fire, traffic control and emergency services are paid for by the producers of EDC. EDC maintains the highest standard of care on all fronts.

We all know Insomniac is not going to want to leave Las Vegas even though they’ll threaten to. Where else are they going to be able to sell 345,000 tickets and make it easy and affordable for people to fly in for up to a week? The saga continues.