The times, they are a'changing
By Tim Pershing, Outpost contributor
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From the comstock to casinos to corporations |
State officials realize that because Nevada has a tourist-based economy, the boom may not last forever because many other states are legalizing gambling.
At the Nov. 13 Governor's Economic Development Conference at Caesar's Palace in Las Vegas, Gov. Bob Miller highlighted several key areas Nevada official will focus on to remain economically sound in the future.
"Nevada has built a sold and secure base of incentives and we have unbeatable communities, but it takes more than that to improve and diversify our economic base," Miller said in a prepared statement at the conference. "There is a need to adapt our strategies to the new era of change."
Miller said Nevada can do this by attracting foreign investors, encouraging biomedical and technological industries and courting the motion picture and television industries to use locations in Nevada.
But in his speech, Miller cautioned that Nevada's boom could end any time.
"California and other states have begun aggressive campaigns to keep and attract new business," Miller said. "Whereas nearly 50 percent of all company relocations to Nevada came from California in 1996, only 25 percent came from California in 1997. This dramatic shift is evidence of an ever-changing business environment and provides us with some indication about how we need to focus our attention."
One of the ways state administrators are trying to prepare for this is by incorporating businesses. By incorporating here, companies outside Nevada can legally use the state as a headquarters on paper to take advantage of Nevada's enticing tax laws. The companies can do this without ever building a warehouse or hiring one single employee in the state.
State officials point to several tax advantages for businesses that incorporate here: Nevada has no corporate income tax, no taxes on corporate shares, no franchise tax and no personal income tax. In addition, the state has minimal disclosure and reporting requirements.
According to state estimates, businesses can save 10 percent a year by doing business in Nevada because of the tax laws.
The companies pay a one-time incorporation fee and an annual fee thereafter. This program, introduced by then Secretary of State Cheryl Lau and passed by the 1991 state legislature, brought in $30 million last year. While this may seem like a lot, the state tax on cigarettes alone brought in $38 million during the same period.
But Secretary of State Dean Heller says Nevada has only begun to tap the vast resources of the business industry.
"We know that gaming has a saturation level," Heller says. "We will have too many people in Nevada for gaming to support."
And this is the main reason for the state's venture into revenue outside gaming, Heller says.
"Last year over 32,000 new corporations were filed here," Heller says. "In 1997, we expect over 36,000. It is the second-largest revenue producer in the state behind taxation."
To give a perspective of the potential money to be made by this practice, Heller says that Delaware brings in about $300 million a year from incorporating.
"That is comparable to our gaming revenue," he said.
Heller hopes companies that incorporate here eventually will realize the benefits of Nevada and move here permanently. Heller says he is also trying to make incorporating easier by allowing companies to file on the Internet.
As for the influx of retirees and businesses, Heller points to two issues that make Nevada a sort of utopia for money-concerned Americans.
"There are low property taxes and no state income tax," Heller says. "There is every reason to come into this state."
People seem to agree because to the thousands of new residents who flock here every year, all that glitters is not gold. Its silver.
copyright 11/15/97 Nevada Outpost
http://www.jour.unr.edu/outpost
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