In his annual list of programs he considers examples of federal budget excess, Republican Sen. Tom Coburn says such business write-offs cost the federal government $17.5 million a year, the Las Vegas Sun reported Tuesday.
"Brothels can take deductions for groceries, 'salaries and wages of prostitutes, rent, utilities and taxes and licenses' ... . 'Breast implants and ... costumes' have also been ruled allowable deductions by the Internal Revenue Service," Coburn said in listing 100 items he touted as reducing the federal deficit if eliminated.
The tax code does not have a special section for houses of prostitution. Brothels are legal in Nevada and consequently can take advantage of standard business deductions.
Coburn thinks that should change. He notes prostitution is legal in only 10 counties of the United States. Those counties have a combined population of only about 300,000 people, he said, making brothels unlikely to be "economic drivers for communities."