Accountable USA - Nevada

Nevada, one of the few states without a broad-based personal income tax or corporate income tax, does impose a tax on businesses based on the gross wages they pay to their employees. The business tax was the product of a long debate and only enacted in 2003.

The state is not known for lavish subsidy deals for individual companies, but it offers several as-of-right tax breaks with very broad qualifying criteria. For example, the sales and use abatement applies to purchases of any capital equipment, and the modified business tax and personal property tax abatements are available to basically any new or expanding business. New and expanding firms which hire at least ten employees are eligible for the Train Employees Now workforce development program, funded by the state.

Among the few subsidy deals of any size in the state have involved a Cabela’s store and a General Motors distribution center (see below). 

 Nevada is also one of only a handful of states that still does not publish any sort of tax expenditure budget. There is also limited company-specific online disclosure about its major economic development programs.  

Key Subsidy Programs

Subsidy Program Recent Annual
Cost
Online Recipient
Disclosure
Recipient Disclosure
Score
Job-Creation/
Job-Quality Score**
Monitoring/
Enforcement Score***

Modified Business Tax Abatement

reductions of business tax rates for new and expanding businesses, based on wage rates, hiring levels and amounts of capital investment

not available
0/100
93/100
82/100

Personal Property Tax Abatement

abatement up to 50% on business personal property taxes owed by companies that locate or expand their business in the state. (Disclosure source discovered after our report was published.)

not available
0/100
90/100
80/100

Sales and Use Tax Abatement

Reductions in the sales and use tax rate to 2% for purchases of capital equipment

not available
0/100
90/100
75/100

Train Employees Now

new and expanding firms that hire at least 10 people are reimbursed for up to 75% of training costs

$523,000 (2011)
0/100
53/100
57/100

* The score is derived from the Good Jobs First report Show Us the Subsidized Jobs (January 2014).

** The score is derived from the Good Jobs First report Money for Something (December 2011).

*** The score is derived from the Good Jobs First report Money-Back Guarantees for Taxpayers (January 2012).

Major Subsidy Deals

Cabela’s (2007)

After construction was underway on a 125,000 square-foot store in Reno in 2007, the outdoor sporting goods chain Cabela’s worked with local officials to use up to $40.5 million in state Sales Tax Anticipated Revenue (STAR) bonds to help meet its financing needs. STAR bonds, created in 2005, can be used if the Nevada Tourism Commission certifies that half of the customers for a new project will be tourists. Cabela’s purchased the bonds, which were to be paid off through the diversion of 75 percent of the store’s sales tax receipts over a 20-year period.

Critics questioned Cabela’s claim that the store, which opened in January 2008 with 250 employees, would bring three million additional tourists a year to the city, despite its indoor mountain, waterfall, 26,000-gallon aquarium and more than 400-plus taxidermied animals. In fact, sales plummeted in 2009, and neither Cabela’s nor another Reno project built using STAR bonds was generating anticipated amounts of tax receipts. Cabela’s has also faced dozens of prevailing wage complaints stemming from the hiring practices of its construction contractor in Reno. In 2011 there were reports that Cabela's was dipping into a reserve fund to make STAR bond payments because of sales tax revenue shortfalls. (Key sources)

General Motors (2001)

When General Motors decided in 2001 that it wanted to build a new $30 million parts distribution center in the Stead section of Reno to replace its facility in nearby Sparks, the company made it clear that it wanted subsidies. Public officials were eager to oblige a major employer: the Reno City Council promptly approved a sales tax exemption worth about $112,000 on GM’s equipment purchases for the new operation. Then the state Commission on Economic Development approved a $1.3 million subsidy package, including more sales tax exemptions, reductions in state business taxes, a 50-percent abatement on business personal property, and $152,000 in training funds. The U.S. Department of Transportation later provided a $1 million grant to provide rail service to the facility. Workers at the distribution center are represented by United Auto Workers Local 2162. (Key sources)

Walmart in Nevada

  • Good Jobs First found no instances of Wal-Mart subsidies in Nevada, but given the absence of comprehensive centralized data, it is still possible that deals have quietly occurred.
  • At least 1 Wal-Mart location in Nevada has challenged its property tax assessment.
  • Many Wal-Mart workers are ineligible for health coverage from their employer or choose not to purchase what is available, because it is too expensive or too limited in scope. These workers often turn to taxpayer-funded health programs such as Medicaid. Nevada is among those states that have not disclosed data on the employers with the most workers or their dependents enrolled in such programs.
  • Wal-Mart receives about $670,000 a year from a state policy that allows retailers to keep a portion of the sales tax they collect from customers.

For more information, see the Nevada page of Wal-Mart Subsidy Watch.