Foreign Direct Investment

Transcription

1 Foreign Direct Investment Information WHY NEVADA??? Nevada consistently ranks at the top of business surveys as one of the most businessfriendly states in the United States. It is not surprising that entrepreneurs choose to start up in Nevada and CEOs of multi-national companies choose to incorporate or place operations in Nevada.

2 Table of Contents Section 1.. Nevada - Your Business Opportunity Section 2... Taxes & Incentives Section 3... Foreign Trade Section 4... Immigrant Investor Program Section 5.. Foreign Companies in NV Section 6 Infrastructure & Support

3 Section 1 Nevada- Your Business Opportunity

4

5 Nevada s s Business Case In the end, the business basics are what really matter: proximity to suppliers and strong linkages, proximity to customers, an adequate supply of skilled labor, adoption of technological innovation, and wellmaintained and efficient infrastructure.

6 Nevada - Your Business Opportunity: Advantages that make Nevada popular for business opportunities: 1. Corporate/Business Advantages Tax structure, consistent tax & business policies Low cost to incorporate and business friendly environment Incentive programs 2. Geographic Location & Resources Proximity to large markets (megaregions) Excellent infrastructure (transportation & logistics) Natural resources 3. Education, Workforce and Lifestyle Excellent education system that collaborates with the business sector Accessible and efficient workforce

7 Tax Structure Comparison Major Tax Categories: Nevada vs. Representative States in the Region: State Nevada Corporate Income Tax No Personal Income Tax No Sales Tax California Arizona Utah Oregon Idaho Washington No No New Mexico Texas No No Florida No North Carolina Tennessee No Western Region Mid-West Region Eastern Region Michigan

8 Nevada s s Corporate & Business Advantages: Nevada s Tax Structure is one of the least burdensome in the nation: NO Corporate Income Tax NO Personal Income Tax NO Inventory Tax NO Unitary Tax NO Franchise Tax NO Inheritance Tax NO Special Intangible Tax State of Nevada was ranked # 4 best state in the Tax Foundation s 2011 State Business Tax Climate Index. Nevada 4 Florida 5 Washington Utah Texas Oregon 14 Michigan Idaho Tennessee New Mexico Arizona 28 North Carolina 39 California 48

9 Best & Worst U.S. States for Doing Business: Chief Executive's sixth annual survey asked 543 CEOs to grade each state based on the following criteria: Taxation & Regulation, Workforce Quality Living Environment. Name of State: Nevada State of Nevada was ranked # 5 based on given criteria. Ranking 5 Gross State Product ($ per capita) 127,213 Civilian Labor Force 1,375,100 Employment 1,196,600 Population Growth Rate 1.04% Source

10 Entrepreneur Friendly States: South Dakota No. 1 Texas No. 2 Nevada No. 3 Wyoming No. 4 Washington No. 5 Most Friendly California No. 49 New Jersey No.50 Least Friendly D.C. No.51 Source: Small Business & Entrepreneurship Council. Factors in ranking included taxes and regulatory cost, government spending, property rights, health cares, energy cost, among others

11 State Incentive Programs: Sales & Use Tax Abatement on eligible machinery and equipment; under abatement rate would be 2% Sales Tax Deferral setting up interest free payment plan for taxes in the equal monthly payments over 60 months period (5Yrs) Modified Business Tax (Payroll Tax) Abatement 50% for 4 Yrs on new jobs Personal Property Tax Abatement up to 50% abatement of personal property tax for up to 10 years on eligible equipment In addition to tax incentives, the State of Nevada offers training program incentives: Train Employees Now (TEN) - training administered and conducted in partnership with Nevada s community colleges On the Job Training administered by Nevada Department of Employment Training and Rehabilitation (DETR) Job Placement - Nevada Job Connect recruitment and employee search/job placement services are available at no cost to the employer

12 International Service Foreign Trade Zones: FTZ are restricted-access sites considered outside the U.S. Customs territory, but physically located in the U.S. Benefits of FTZ: Allows foreign and domestic merchandise to be admitted for operations such as storage, exhibition, assembly, manufacture and processing, without being subject to formal U.S. Customs entry procedures, duties or excise taxes. With no inventory, corporate income, or personal income taxes, Nevada s FTZ offers an attractive incentives. Nevada s Foreign Trade Zones: FTZ Northern Nevada, Reno/Sparks: - at nearly 1,300 acres is one of the largest in the nation and has been approved for Alternative Site Framework which allows most of the metro region to be designated an FTZ in approximately 30 days. FTZ Southern Nevada, Las Vegas: - is one of the most cost-effective and best situated for storing and distributing goods in the West.

13 International Service EB5 Visa Program: The immigrant investor, or EB-5, program is a highly beneficial permanent residence option for foreign investors. Basic Criteria: The foreign investor may invest: in a commercial enterprise owned by investor or by other parties, or in a government approved Regional Center that will create/preserve 10 full time jobs for US workers. The amount of investment is: $500,000 in targeted rural or high unemployment areas $1 million in other areas Important Note: Investor has to be able to document the lawful source of investment funds, whether his or her own or funds given to him or her as a gift. The permanent residence obtained by the investor is conditional for two years and can be made permanent upon satisfying USCIS at the end of the two years that the investment proceeds have not been withdrawn and the requisite jobs have been created. For detailed information and program criteria, contact a local Regional Center - Nevada EB5 Regional Center: Clark County, Nevada Regional Economic Development Center (NREDC), or Las Vegas Regional Center.

14 Geographic Location - Proximity to Major Markets Cascadia Location: Centrally located to major western cities including San Francisco, Portland, Salt Lake City, Las Vegas, and Los Angeles. Megaregions: Northern California Mega Region Southern California Mega Region Reno Las Vegas Salt Lake City Arizona Sun Corridor Denver Front Range As a part of Northern California and Southern California Megaregion Nevada has easy access to California's markets without California's tax burden. combined 12% of US GDP is represented in these two regions. Because of it s central location, Nevada also has access to megaregions of northwest Cascadia, Arizona Sun Corridor and Front Range megaregion. Source: (Megaregions - metropolitan area that expanded creating interlocking economic systems)

15 Infrastructure Transportation Network Nevada is strategically located with an extensive transportation network Highway Structure: Airports: I-80 corridor servicing east-west traffic US 395 corridor servicing north-south traffic US 50 corridor - connects to the US 395 corridor US 95 corridor connecting the I-80 corridor and the US50 corridor and the I-15 Electric Highway an existing network of chargers along I-80 to get EVs from the Bay Area to Tahoe. NV Energy is working to extend this electric highway into Reno. McCarran Intl. Airport (Las Vegas) 6th busiest airport in the Northern America Reno-Tahoe Intl. Airport strategically located between major ports of San Francisco and Los Angeles, this airport is an official diversion airport for all CA Bay Area airports. Railroad: Transcontinental Railroad has quick access to the ports in the San Francisco Bay area and provides efficient rail cargo distribution.

16 Infrastructure Logistics & Distribution Network: The logistics industry provides a complete transportation network, and international logistics services support to key business sectors. More than 50 carriers serve Nevada, offering transcontinental, fast-freight and van-line shipping to major markets that are within one or two day truck transit range: Reno area: Logistics and distribution are the largest segment of the Greater Reno-Tahoe economy and it s ranked 4-Star Logistics Metro by 2006 Logistics Quotient, Expansion Management and Logistics today. Las Vegas area: Las Vegas is a net-importer more freight arrives than leaves, making the shipping cost to other cities very low. City Reno Highway Miles Las Vegas Highway Miles Denver, CO 1, Los Angeles, CA Phoenix, AZ Portland, OR 586 1,189 Sacramento, CA Salt Lake City, UT San Diego, CA San Francisco, CA Seattle, WA 721 1,261 One and two day trucking service from Nevada to major markets

17 Workforce & Employment: Nevada is a Right to Work State: Right to Work Law secures the right of employees to decide for themselves whether or not to join or financially support a union. However, employees who Work in the railway or airline industries are not protected by a Right to Work law, And employees who work on a federal enclave may not be. Policy on Union Membership, Organization, etc. - No person shall be denied the opportunity to obtain or retain employment because of non-membership in a labor organization. Prohibited Activity - Agreements prohibiting employment because of non-membership in labor organization; strike or picketing to force or induce employer to make agreement; compelling person to join labor organization, strike, or leave employment; conspiracy to cause discharge or denial of employment or to induce refusal of work on basis of membership

18 Workers Compensation: Nevada law requires all business owners to obtain and maintain workers compensation coverage: Employers may obtain workers compensation insurance from a private insurance company authorized to provide workers compensation in Nevada by the Division of Insurance (DOI). If qualified, an employer may be self-insured through an approval process overseen by the DOI. For smaller businesses there are associations of selfinsured employers - groups of employers (generally in the same type of business) which are members of the association.

19 Education Key to Success: Excellent public & private K-12 education: - include several charter schools such as Davidson Academy, and Carrier Technical Academies and Advanced Technologies Academy Higher education: Individuals* who relocate to Nevada for the primary purpose of fulltime employment are eligible for in-state registration fees at the Nevada System of Higher Education: University of Nevada, Reno University of Nevada, Las Vegas College of Southern Nevada Nevada State College Truckee Meadows Community College Western Nevada College Sierra Nevada College Millennium Scholarship Program: Qualifying high school graduates in Nevada are eligible to receive the scholarship towards their cost of education at any Nevada public college or university, as well as certain Nevada not-for-profit universities. *Spouses and dependent children may be deemed eligible residents for tuition purposes.

20 Education - Quality K-12 K Education: The Davidson Academy of Nevada: A free public school for profoundly gifted middle and high school students. The mission of The Davidson Academy is to provide an advanced educational opportunity matched to their abilities, strengths and interests. Located on the University of Nevada, Reno campus gives the opportunity for students to access university courses for advanced studies. To learn more visit: Advanced Technologies Academy: A Clark County School District Magnet School. Magnets have their roots in the concept of district-wide specialty schools. Academy is based upon the concept of Academics plus Technology where students are attending A-TECH study one of eight specialized program areas based upon the integration and use of technology. To learn more visit:

21 Higher Education University of Nevada Reno (UNR): The College of Engineering: Developed nationally recognized research and outreach programs One of the best graduate schools in the nation and also ranks in the top 5% of the 4,000 four-year colleges and universities (U.S. News and World Report). Research and Facilities: - maintains a number of laboratories and research centers, including Computer Networking Laboratory, Software Engineering Laboratory, Electric Drives Lab, Sustainable Energy Laboratory, Renewable Energy Center Department of Mechanical Engineering: Accredited by the Engineering Accreditation Commission of the Accreditation Board for Engineering Technology (ABET), Inc. The Great Basin Center for Geothermal Energy : Conducting research on geothermal energy as viable energy source Renewable Energy Center, UNR and College of Engineering, UNR are conducting research in collaboration with Sierra Nevada Co. and Desert Research Institute to develop a transportable, renewable-energy, power generating system to produce and supply energy. (

22 Higher Education University of Nevada, Las Vegas (UNLV): The Howard R. Hughes College of Engineering: Provides research and academic programs to more than 1,600 undergraduate and graduate students. Research and Facilities: - maintains a number of laboratories and research centers, including maintains a number of laboratories and research centers, including Center for Energy Research, Center for Materials and Structures, Energy Materials Interaction Technology Initiative of Nevada. The Harry Reid Center for Environmental Studies: Provides support multi-disciplinary research teams, provide expertise to solve complex environmental problems, and develop innovative environmental monitoring technology. UNLV and a number of committed community members are developing a Solar Solution Center that will establish UNLV as a national center of excellence a solar research hub of the Southwest. (

23 Higher Education Desert Research Institute (DRI): Conducts cutting-edge applied research in air, land and life, and water quality across Nevada, the United States and on every continent. For higher education students, DRI provides a learning environment strongly focused on collaborative, interdisciplinary research: Atmospheric Sciences Graduate Program Graduate Program of Hydrologic Sciences at UNR (rank top 10 by US News & World Report GreenPower Program and more DRI is also committed to Nevada's K-12 education system and the professional development of its teachers. DRI emphasizes "teaching the teachers" so they can bring real world knowledge back into their classrooms. The DRI Clean Technologies and Renewable Energy Center is focused on wind energy application, bio-mass energy systems research and development

24 Millennium Scholarship Program: In 1999, the Governor Guinn Millennium Scholarship initiative was enacted into law by the Nevada Legislature, creating the Millennium Scholarship trust fund to be administered by the State Treasurer. Qualifying high school graduates in Nevada are eligible to receive the scholarship towards their cost of education at any Nevada public college or university, as well as certain Nevada not-for-profit universities.

25 World Class Research Institutes: Nevada has some of the world finest research institutes: UNLV Harry Reid Research & Technology Park Nevada Cancer Institute Cleveland Clinic Lou Ruvo Center for Brain Health The Nevada Neuroscience Institute Desert Research Institute (DRI) Renewable Energy Center - UNR

26 Why Nevada? Corporate Advantages: It is one of the top states in which to operate because of its well-established reputation for business-friendly laws and tax structure, an accessible regulatory environment, legal system that works in favor of business, and economic development incentive programs. Geographic Location - Proximity to Major Markets Nevada has easy access to California's markets, a superior infrastructure logistic & distribution network, telecommunications and utilities. Lifestyle Advantages: Strong quality educational institutions, available professional and costeffective workforce. Fast-paced cities, comfortable, family-based communities, arts, culture, dependable public services, and diverse recreational opportunities.

27 Nevada Commission on Economic Development (800) West Nye Lane Carson City, NV Phone (775) Fax (775) E. Washington Avenue, Suite 5400 Las Vegas, NV Phone (702) Fax (702)

28 Section 2 Taxes and Incentives

29 Low Tax Environment TAX CLIMATE The outstanding tax climate in Nevada is one of the best reasons to do business in the state. This tax structure also clearly distinguishes Nevada as offering a business environment very few states can match. In Nevada there is: No Corporate Income Tax No Personal Income Tax No Franchise Tax on Income No Inheritance or Gift Tax No Unitary Tax No Estate Tax Competitive Sales and Property Tax Rates Minimal Employer Payroll Tax STATE INCENTIVES In addition to the minimal tax environment, Nevada has programs to reduce the amount of taxes that it does impose. We offer sales tax abatement and deferral programs, payroll tax abatements and property tax abatements to qualifying companies. Since the state doesn t collect corporate income taxes, we don t offer complicated and misleading tax credits like many other states.

30 For more detailed information about these programs, please see the following overviews: Sales and Use Tax Abatement Sales and use tax abatements are available for purchases of capital equipment. An application for abatement must be made in advance to the Commission or, if the purchase has been made, within 60 days after the date on which the tax was due. If application for abatement is approved, the taxpayer is eligible for a refund of the tax paid (NRS (2)). Sales and Use Tax Deferral Sales and use tax deferrals are available for purchases of capital equipment. An application for deferral must be made in advance to the Commission or, if the purchase has been made, within 60 days after the date on which the tax was due. If the application for a deferment is approved, the taxpayer is eligible for a refund of the tax paid (NRS (2)). Personal Property Tax Abatement Partial abatement from personal property taxes is available to companies who locate or expand their business in Nevada. The applicant must apply for abatement not more than one year before the business begins to develop for expansion or operation in Nevada. Applications are due at least 15 working days prior to the Commission meeting. Modified Business Tax Abatement A modified business tax (excise tax) is imposed on each employer at the rate of 0.63 percent of the wages as defined in NRS , paid by the employer during a calendar quarter with respect to employment. Effective July 1, 2005, a partial abatement of tax

31 during the initial period of operation is available. Qualifying employers may apply for an abatement of 50 percent of the tax otherwise due during the first four years of its operations. Train Employees Now (TEN) The Nevada Train Employees Now Program provides short-term, skills based intensive job training to assist new and expanding firms to reach productivity quickly. A customized program is designed covering recruitment, hiring and job training for Nevada residents. It is the State's policy to support firms demonstrating a humanrelations commitment through a meaningful wage and fringe benefit policy. Property Tax Abatement for Recycling Partial abatement for real property taxes for recycling is available to companies who locate or expand their business in Nevada. The applicant must apply for abatement not more than one year before the business begins to develop for expansion or operation in Nevada. Applications are due at least 15 working days prior to the Commission meeting. Intellectual Property Development Partial abatement of sales tax, modified business tax and personal property tax is available to intellectual property development companies who locate or expand their business in Nevada. The applicant must apply for abatement not more than one year before the business begins to develop for expansion or operation in Nevada. Applications are due at least 30 working days prior to the Commission meeting. Source: Nevada Commission on Economic Development, January 2011

32 Incentives All links open in Adobe Acrobat in a new window Minimum State Requirements for Urban Areas Minimum State Requirements for Rural Areas Minimum State Requirements for Expansions Minimum State Requirements for Urban Recycling and Intellectual Property Minimum State Requirements for Rural Recycling and Intellectual Property Financial Incentives for Energy Efficiency - This summary table provides a snapshop of government and utility financial incentives that promote energy efficiency in the United States. Financial Incentives for Renewable Energy - This summary table provides a snapshot of government, utility, and non-profit financial incentives that promote renewables in the United States. Property All links open in Adobe Acrobat in a new window Taxes Nevada Property Tax Rates by County Calculating Real Property Taxes The formula for calculating real property tax is as follows: Taxable Value x Level of Assessment = Assessed Value Assessed Value x Tax Rate = Total Real Property Tax For more information, please see How Property Taxes are Calculated. Calculating Personal Property Taxes

33 Using the Cost Conversion Factor tables in the Personal Property Manual, use the following formula to calculate the assessed value. The assessed value is the value on which taxes are calculated. Actual Cost x Cost Index (for appropriate year) = Cost of Replacement Cost of Replacement x Percent Good = Taxable Value Taxable Value x.35 = Assessed Value Assessed Value x Tax Rate = Total Personal Property Tax For more information on state incentives or taxes, contact our Economic Development Department at Comparisons Tax All links open in Adobe Acrobat in a new window Comparisons Arizona vs Nevada o Based on $25 million in net profit o Based on $50 million in net profit o Based on $100 million in net profit California vs Nevada o Based on $25 million in net profit o Based on $50 million in net profit o Based on $100 million in net profit Colorado vs Nevada o Based on $25 million in net profit o Based on $50 million in net profit o Based on $100 million in net profit Idaho vs Nevada o Based on $25 million in net profit o Based on $50 million in net profit

34 o Based on $100 million in net profit New Mexico vs Nevada o Based on $25 million in net profit o Based on $50 million in net profit o Based on $100 million in net profit Oregon vs Nevada o Based on $25 million in net profit o Based on $50 million in net profit o Based on $100 million in net profit Utah vs Nevada o Based on $25 million in net profit o Based on $50 million in net profit o Based on $100 million in net profit Washington vs Nevada Company Paid Taxes Payroll taxes Effective July 1, SB429 changes the tax rate for general business employers and created a tiered system. If the sum of all taxable wages, after health care deductions, paid by the employer does not exceed $62,500 for the calendar quarter, the amount of tax is 0.5% of the sum of those wages (0.005). If the sum of all the wages paid by the employer exceeds $62,500 for the calendar quarter, the tax is $ plus 1.17% of the amount the wage exceeds $62,500. For example: if the sum of all wages for the 12/09 quarter is $101,000. The tax is $ plus $ ( x $38,500 which

35 is the amount exceeding $62,500) = total tax due is $ For more information please visit the Nevada Department of Taxation. Inventory Tax Nevada has NO Inventory Tax on inventories held for sale within Nevada or for interstate transit. Company Paid Unemployment New employers pay Unemployment Insurance (UI) taxes at a rate of 3 percent of taxable wages until they are eligible for experience rating. The employer retains this rate for a period of 14 to 17 calendar quarters (depending on the quarter in which he becomes subject to the law), after which his rate will be determined under the "Experience Rating" system. Once you are eligible for experience rating, your rate is determined by two factors: Your reserve ratio, which is a measure of your previous experience with unemployment (See page 17 of the Nevada Unemployment Compensation Program employer handbook); and The reserve ratio schedule in effect. The administrator establishes, by regulation, the schedule to be in effect for each calendar year. Changes to the schedule are made according to the trust fund balance, economic conditions, and forecasts. The law provides for an annual test of the trust fund for a guideline. The balance should be sufficient to pay benefits for one full year, disregarding any additional income (Department of Labor recommends sufficient funds to pay benefits for 1-2 years).

36 Business Tax Climate Index Rankings State Overall Rank Corporate Tax Individual Income Tax Index Rank Sales Tax Unemployment Insurance Tax Property Tax Nevada Arizona California Colorado Idaho New Mexico Oregon Utah Washington Source: Tax Foundation's State Business Tax Climate Index, 2011 rankings Note: Rankings do not average across to total Business Tax Index State State Tax Score Rank Tax Score Personal Income Tax Ranking/Rate State Rankings Capital Gains Tax Ranking/Rate Corporate Income Tax Ranking/Rate Corporate Capital Gains Tax Ranking/Rate Nevada / / / /0.000 Arizona / / / /6.968 California / / / /8.840 Colorado / / / /4.630 Idaho / / / /7.600 New Mexico / / / /7.600 Oregon / / / /7.900 Utah / / / /5.000 Washington / / / /0.000 State Rankings State State & Local Property Tax Adjusted Unemployment Tax Ranking/Rate Ranking/Rate Nevada 19/ /3.25 Arizona 24/2.98 3/0.86

37 California 16/2.74 2/0.80 Colorado 20/ /1.11 Idaho 11/ /4.98 New Mexico 5/ /2.81 Oregon 26/ /4.02 Utah 14/ /6.39 Washington 17/ /4.04 Source: Small Business & Entrepreneurship Council, 2010 rankings

38 Sales and Use Tax Abatement State of Nevada NRS , Partial sales and use tax abatements are available for purchases of capital equipment. The abatement reduces the applicable tax rate to 2%. An application for abatement must be made in advance to the Commission or, if the purchase has been made, within 60 days after the date on which the tax was due. If the application for abatement is approved, the taxpayer is eligible for a refund of the tax paid (NRS (2)). Eligible Goods are capital goods which an allowance for depreciation is authorized pursuant to the US Internal Revenue code, Section 179, as described in Publication 534, Depreciation under Qualifying Property, and which directly provides jobs within the State of Nevada as a result of the use of the capital goods by the purchaser. Ineligible Goods are capital goods purchases including, but not limited to: buildings or their structural components, equipment utilized by a public utility, equipment used for medical treatment, and machinery and equipment used in construction, gaming, and mining industries. Objectives. The purchases are consistent with the Commission s State Plan for Industrial Development and Diversification. The overall objectives of the State Plan for Economic Diversification and Development include: Diversification from the gaming and hospitality industry; Exporting a majority of goods or services outside the economic region; Attraction of basic industries such as manufacturing, warehousing and distribution, and back-office operations all of which shall create primary jobs as defined in the NAC; Attraction of business facilities and services such as corporate headquarters, research and development operations, and producer services all of which shall create primary jobs as defined in the NAC; and Expansion of existing basic businesses and industries as described above. The Company s Responsibilities. The company will provide a medical insurance plan for all employees including an option for dependent health insurance coverage. The company will also pay at least 25% of the employee premium cost. The business is expected to register pursuant to the laws of Nevada and to obtain all licenses and permits required by Nevada and the county, city or town in which the business operates. The applicant commits to maintaining the business in Nevada for 5 years. Abatement is voidable if business fails to comply with any of the terms of the agreement. Audits will be done by the Nevada Department of Taxation after 2 and 5 years to ensure compliance. Mission: The Nevada Commission on Economic Development promotes a robust, diversified and prosperous economy, enriching the quality of life for Nevada citizens by stimulating business expansion and retention, encouraging entrepreneurial enterprise, attracting new businesses and facilitating community development to enable economic growth and prosperity. Criteria (2 of 3): The average hourly wage for the fiscal year. The number of full-time permanent jobs by the fourth quarter of operation in Nevada, and continue to employ the minimum. The capital investment required for the type of business or expansion based on county/city population. Eligibility. The Commission on Economic Development will look for the following criteria when reviewing the applicant s eligibility for abatement. Two of the following three criteria must be met Wage Requirement. The company s average hourly wage at the Nevada facility must equal or exceeds 100% of the county average hourly wage or statewide average hourly wage, whichever is less. The statewide average hourly wage established for FY 2012 is $ The FY 2012 countywide average wages are available in a separate document.

39 Sales and Use Tax Abatement Page 2 Vision: Founded on principles of innovation, sustainability and inclusiveness, Nevada s economic platform will be driven by renewable energy, future-based technology and human ingenuity to promote new business opportunity in every community. Number of Jobs Required. For counties or cities with a population of more than 100,000 or 60,000 respectively requires a minimum of 75 full-time permanent jobs in Nevada by the fourth quarter of operation and continue to employ at least the minimum. For counties or cities with a population of less than 100,000 or 60,000 respectively requires a minimum of 15 full-time permanent jobs in Nevada by the fourth quarter of operation and continue to employ at least the minimum. For an expansion, the company must increase the number of employees on the payroll by 10% or six employees, whichever is greater. Capital Investment Requirement. For counties or cities with a population of more than 100,000 or 60,000 respectively a capital investment of $1 million is required. For counties or cities with a population of less than 100,000 or 60,000 respectively a capital investment of $250,000 is required. As a condition of approval, applicant agrees in writing to supply upon request copies of all necessary records for the Commission s director to verify the applicant meets all requirements. The Commission on Economic Development reserves the right to grant or deny certification on a case-by-case basis. If an applicant is approved, the taxpayer is eligible for tax abatements for two years. The start date begins when the first piece of equipment is delivered to the designated facility or taxes are paid on the equipment. If a business is not maintained in this state for five years after tax abatement approval, the company will repay to the Department of Taxation the amount of the abatement allowed before the failure to comply. Interest will be repaid on the amount due at the rate most recently established pursuant to NRS , or portion thereof, from the last day of the month following the period payment would have been made had the abatement not been granted, until the date of the actual tax payment. The Nevada Department of Taxation can determine the business has substantially complied with the requirements. Applicant should allow a minimum of 30 working days prior to the next regularly scheduled Commission meeting for application processing. Those requiring special review and consideration may require a longer period of time to complete the certification process. The applicant will register with the Department of Taxation on a separate form if an account has not been established. Upon certification, the Commission will immediately forward the application for abatement to the Nevada Department of Taxation the administrator for tax abatements. The Tax Department s Revenue Division will determine what purchases qualify for abatement, verify the sale, the price paid, and the date of sale. 808 West Nye Lane Carson City, Nevada Fax: / (7/11)

40 Sales and Use Tax Deferral State of Nevada NRS , Sales and use tax deferrals are available for purchases of capital equipment. An application for deferral must be made in advance to the Commission or, if the purchase has been made, within 60 days after the date on which the tax was due. If the application for a deferment is approved, the taxpayer is eligible for a refund of the tax paid (NRS (2)). Eligible Goods are capital goods that an allowance for depreciation is authorized pursuant to the U.S. Internal Revenue Code, Section 179, as described in Publication 534, Depreciation under "Qualifying Property," and will directly provide jobs within the State of Nevada as a result of the use of the capital goods by the purchaser. Ineligible Goods are capital goods purchases including, but not be limited to: buildings or their structural components, equipment utilized by a public utility, equipment used for medical treatment, and machinery and equipment used in gaming or mining. Objectives. The purchases are consistent with the Commission's State Plan for industrial development and diversification. The overall objectives of the State Plan for Economic Diversification and Development include: Diversification of the gaming and hospitality industry; Exporting a majority of goods or services outside the economic region; Attraction of basic industries such as manufacturing, warehousing and distribution, and back-office operations all of which shall create primary jobs as defined in the NAC; Attraction of business facilities and services such as corporate headquarters, research and development operations, and producer services all of which shall create primary jobs as defined in the NAC; and Expansion of businesses and industries as described above. Expansions must include increase in the number of employees and increase in the square footage of existing facility. The Company s Responsibilities. The company will provide a medical insurance plan for all employees including an option for dependent health insurance coverage. The company will also pay at least 25% of the employee premium cost. The business is expected to register pursuant to the laws of Nevada and to obtain all licenses and permits required by Nevada and the county, city or town in which the business operates. The applicant commits to maintaining the business in Nevada for 5 years. Abatement is voidable if business fails to comply with any of the terms of the agreement. Audits will be done by the Nevada Department of Taxation after 2 and 5 years to ensure compliance. Mission: The Nevada Commission on Economic Development promotes a robust, diversified and prosperous economy, enriching the quality of life for Nevada citizens by stimulating business expansion and retention, encouraging entrepreneurial enterprise, attracting new businesses and facilitating community development to enable economic growth and prosperity. Criteria (2 of 3): The average hourly wage for the fiscal year. The number of full-time permanent jobs by the fourth quarter of operation in Nevada, and continue to employ the minimum. The capital investment required for the type of business or expansion based on county/city population. Eligibility. The Commission on Economic Development shall certify the applicant's eligibility for deferment if: Number of Jobs Required. The purchase will provide a minimum of 10 permanent jobs in Nevada. Wage Requirement. The company's average hourly wage for employees at the

41 Sales and Use Tax Deferral Page 2 Nevada facility will equal or exceed 80% of the average statewide hourly wage established by the Nevada Department of Employment, Training and Rehabilitation. The average hourly wage established for FY 2012 is $19.83 and 80% is $ Vision: Founded on principles of innovation, sustainability and inclusiveness, Nevada s economic platform will be driven by renewable energy, future-based technology and human ingenuity to promote new business opportunity in every community. Minimum Purchase. A minimum of $100,000 capital equipment purchase is required for a tax deferral. If the sales price is: At least $100,000 but less than $350,000, the tax must be paid within 12 months At least $350,000 but less than $600,000, the tax must be paid within 24 months At least $600,000 but less than $850,000, the tax must be paid within 36 months At least $850,000 but less than 1,000,000, the tax must be paid within 48 months $1,000,000 or more, the tax must be paid within 60 months The Commission on Economic Development reserves the right to grant or deny certification on a case-by-case basis. Applicant should allow a minimum of 30 working days prior to the next regularly scheduled Commission meeting for application processing. Those requiring special review and consideration may be granted a longer period of time to complete the certification process. Upon certification, the commission will immediately forward the application for deferment to the Nevada Department of Taxation the administrator for tax deferrals. The Tax Department s Revenue Division will determine what purchases qualify for deferral, verify the sale, the price paid, the date of sale, and assign the applicable period for payment of the deferred tax. A security bond equal to the tax deferred is required. The applicant will register with the Department of Taxation on a separate form if an account has not been established. Upon certification, the Commission will immediately forward the application for abatement to the Nevada Department of Taxation 808 West Nye Lane Carson City, Nevada Fax: / (7/11)

42 Personal Property Tax Abatement State of Nevada NRS , Partial abatement from personal property taxes is available to companies who locate or expand their business in Nevada. The abatement can be up to 50% of the taxes due for up to 10 years. The applicant must apply for abatement not more than one year before the business begins to develop for expansion or operation in Nevada. Applications are due at least 30 working days prior to the Commission meeting. Objectives. The company is consistent the Commission on Economic Development s State Plan for Industrial Development and Diversification. The overall objectives of the State Plan for Economic Diversification and Development include: Diversification from the gaming and hospitality industry; Exporting a majority of goods or services outside the economic region; Attraction of basic industries such as manufacturing, warehousing and distribution, and back-office operations all of which shall create primary jobs as defined in the NAC; Attraction of business facilities and services such as corporate headquarters, research and development operations, and producer services all of which shall create primary jobs as defined in the NAC; and Expansion of existing basic businesses and industries as described above. Eligible Goods are capital goods which an allowance for depreciation is authorized pursuant to the US Internal Revenue code, Section 179, as described in Publication 534, Depreciation under Qualifying Property, and which directly provides jobs within the State of Nevada as a result of the use of the capital goods by the purchaser. Ineligible Goods are capital goods purchases including, but not limited to: buildings or their structural components, equipment utilized by a public utility, equipment used for medical treatment, and machinery and equipment used in construction, gaming, and mining industries. The Company s Responsibilities. The company will provide a medical insurance plan for all employees including an option for dependent health insurance coverage. The company will also pay at least 25% of the employee premium cost. The business is expected to register pursuant to the laws of Nevada and to obtain all licenses and permits required by Nevada and the county, city or town in which the business operates. The applicant commits to maintaining the business in Nevada for 5 years. Abatement is voidable if business fails to comply with any of the terms of the agreement. Audits will be done by the Nevada Department of Taxation after 2 and 5 years to ensure compliance. Mission: The Nevada Commission on Economic Development promotes a robust, diversified and prosperous economy, enriching the quality of life for Nevada citizens by stimulating business expansion and retention, encouraging entrepreneurial enterprise, attracting new businesses and facilitating community development to enable economic growth and prosperity. Criteria: The average hourly wage for the fiscal year. The number of full-time permanent jobs by the fourth quarter of operation in Nevada, and continue to employ the minimum. The capital investment required for the type of business or expansion based on county/city population. Eligibility. The Commission on Economic Development will look for the following criteria when reviewing applicant's eligibility for abatement. Two of the following three criteria are required: Wage Requirement. The company s average hourly wage at the Nevada facility must equal or exceeds 100% of the county average hourly wage or statewide

43 Personal Property Tax Abatement Page 2 Vision: Founded on principles of innovation, sustainability and inclusiveness, Nevada s economic platform will be driven by renewable energy, future-based technology and human ingenuity to promote new business opportunity in every community. average hourly wage, whichever is less. The statewide average hourly wage established for FY 2012 is $19.83 The FY 2012 countywide average wages are available in a separate document. For new businesses, compliance with this criteria is required. Number of Jobs Required. For counties/cities with a population of more than 100,000/60,000 a minimum of 75 full-time permanent jobs in Nevada is required by the fourth quarter of operation and continues to employ at least the minimum. For counties/cities with a population of less than 100,000/60,000 a minimum of 15 full-time permanent jobs in Nevada in required by the fourth quarter of operation and continues to employ at least the minimum. For an expansion, the company must increase the number of employees on the payroll by 10% or six employees, whichever is greater. Capital Investment Requirement. For counties/cities with a population of more than 100,000/60,000, the business will make a capital investment of $50 million if the business is an industrial or manufacturing business or at least $5 million if the business is not an industrial or manufacturing business. For counties/cities with a population of less than 100,000/60,000, the business will make a capital investment of $5 million if the business is an industrial or manufacturing business or at least $500,000 if the business is not an industrial or manufacturing business. For new businesses, the parameter is required. In cases of expansion, the capital investment must equal at least 20% of the value of tangible property possessed by the business. If a business is not maintained at the approved level in this state for 5 years after tax abatement approval, the company will repay to the Department of Taxation the amount of the abatement allowed before the failure to comply. Interest will be repaid on the amount due at the rate most recently established pursuant to NRS , or portion thereof, from the last day of the month following the period payment would have been made had the abatement not been granted, until the date of the actual tax payment. The Nevada Department of Taxation will determine if the business has substantially complied with the requirements. As a condition of approval, applicant agrees in writing to supply upon request copies of all necessary records for the Commission s director to verify the applicant meets all requirements. The Commission on Economic Development reserves the right to grant or deny certification on a case-by-case basis. The applicant will register with the Department of Taxation on a separate form if an account has not been established. 808 West Nye Lane Carson City, Nevada Fax: / (7/11)

44 Modified Business Tax Abatement State of Nevada NRS 363B.120 A modified business tax is imposed on each employer at the rate of 1.17% on wages over $62,500 after health care deductions per quarter. Wages are as defined in NRS , paid by the employer during a calendar quarter with respect to employment. A partial abatement of the tax during the initial period of operation is available. Qualifying employers may apply for an abatement of 50 percent of the tax otherwise due during the first four years of its operations. Objectives. The business is consistent with the Commission s State Plan for Industrial Development and Diversification. The overall objectives of the State Plan for Economic Diversification and Development include: Diversification from the gaming and hospitality industry; Exporting a majority of goods or services outside the economic region; Attraction of basic industries such as manufacturing, warehousing and distribution, and back-office operations all of which shall create primary jobs as defined in the NAC; Attraction of business facilities and services such as corporate headquarters, research and development operations, and producer services all of which shall create primary jobs as defined in the NAC; and Expansion of existing basic businesses and industries as described above. The Company s Responsibilities. The company will provide a medical insurance plan for all employees including an option for dependent health insurance coverage. The company will also pay at least 25% of the employee premium cost. The business is expected to register pursuant to the laws of Nevada and to obtain all licenses and permits required by Nevada and the county, city or town in which the business operates. The applicant commits to maintaining the business in Nevada for 5 years. Abatement is voidable if business fails to comply with any of the terms of the agreement. Audits will be done by the Nevada Department of Taxation after 2 and 5 years to ensure compliance. Eligibility. The Commission on Economic Development will review the following criteria when regarding the applicant s eligibility for abatement. Two of the follow three criteria must be met: Wage Requirement. The company s average hourly wage at the Nevada facility must equal or exceed 100% of the county average hourly wage or statewide average hourly wage, whichever is less. The statewide average hourly wage established for FY 2012 is $ The FY 2012 countywide average wages are available in a separate document. Mission: The Nevada Commission on Economic Development promotes a robust, diversified and prosperous economy, enriching the quality of life for Nevada citizens by stimulating business expansion and retention, encouraging entrepreneurial enterprise, attracting new businesses and facilitating community development to enable economic growth and prosperity. Criteria 2 of 3 required: The average hourly wage for the fiscal year. The number of full-time permanent jobs by the fourth quarter of operation in Nevada, and continue to employ the minimum. The capital investment required for the type of business or expansion based on county/city population. Number of Jobs Required. For counties or cities with a population of more than 100,000 or 60,000 respectively requires a minimum of 75 full-time permanent jobs in Nevada by the fourth quarter of operation and continue to employ at least the minimum. For counties or cities with a population of less than 100,000 or 60,000 respectively requires a minimum of 15 full-time permanent jobs in Nevada by the

45 Modified Business Tax Abatement Page 2 fourth quarter of operation and continue to employ at least the minimum. For an expansion, the company must increase the number of employees on the payroll by 10% or six employees, whichever is greater. Vision: Founded on principles of innovation, sustainability and inclusiveness, Nevada s economic platform will be driven by renewable energy, future-based technology and human ingenuity to promote new business opportunity in every community. Capital Investment Requirement. For counties or cities with a population of more than 100,000 or 60,000 respectively a capital investment of $1 million is required. For counties or cities with a population of less than 100,000 or 60,000 respectively a capital investment of $250,000 is required. As a condition of approval, applicant agrees in writing to supply upon request copies of all necessary records for the Commission s director to verify the applicant meets all requirements. The Commission on Economic Development reserves the right to grant or deny certification on a case-by-case basis. If an applicant is approved, the taxpayer is eligible for tax abatements for four years. The start date begins when the first qualified employee is hired at the designated facility. If a business is not maintained at the approved level in this state for five years after tax abatement approval, the company will repay to the Department of Taxation the amount of the abatement allowed before the failure to comply. Interest will be repaid on the amount due at the rate most recently established pursuant to NRS , or portion thereof, from the last day of the month following the period payment would have been made had the abatement not been granted, until the date of the actual tax payment. The Nevada Department of Taxation may determine the business has substantially complied with the requirements. Applicant should allow a minimum of 30 working days prior to the next regularly scheduled Commission meeting for application processing. Those requiring special review and consideration may require a longer period of time to complete the certification process. The applicant will register with the Department of Taxation on a separate form if an account has not been established. Upon certification, the Commission will immediately forward the application for abatement to the Nevada Department of Taxation the administrator for tax abatements. 808 West Nye Lane Carson City, Nevada Fax: / (7/11)