Hey, Tax Cheaters--Nevada Is for You

Nevada is my very favorite state. Not just because I was born there or because my father was born there or my mom was the pretty gal in the cowboy hat, smiling on the old windshield sticker that promoted Reno as “The Biggest Little City in the World.”

No, Nevada is my favorite because it has made more from less than any state in the union.

Out of a dried up old salt-lick, Nevada built fun.

People say you can have more fun in Nevada, pretending you’re in New York or Paris, than anywhere--even New York or Paris.

Where else could Hunter S. Thompson write about ingesting a satchel full of illegal drugs and terrorizing a convention of cops and end up in the Modern Library with one of “The World’s Best Books”?

It’s also pretty easy to poke fun at Nevada.

Recently, you may have heard a radio advertisement on behalf of Nevada. California business executives are being urged to saddle up and gallop off to the east in the direction of the Wild West.

An announcer offers many reasons for a business to incorporate in Nevada. I’ll plug a few of them on behalf of my old home state: No corporate income tax. No personal income tax. No franchise tax. No taxes on corporate shares.

Fair enough, as incentives go.

But Nevada is carrying its campaign further. Too far, in fact. I’m afraid it’s getting pretty close to risking its good name and many years of expensive image building.

For a long time now, the state has nurtured a reputation for fair play. No dealing from the bottom. The gangsters are gone, or at least hidden safely away. The odds are against you, but evenly so. Billion-dollar hotels and million-dollar restaurants rise from this foundation of trust. Naughty but nice. Bring the kids.

But with its campaign to lure businesses, Nevada apparently wants you to know that shady play is still welcome there, even encouraged.

Hurry up, all you business cheats! We’ll leave the light on for you.

The overreaching campaign promises more than just a free ride on taxes. If you missed the radio ads, you can read about the incorporation benefits on the official Web site of Nevada Secretary of State Dean Heller (sos.state.nv.us/comm_rec/whyinc.htm).

* No IRS Information Sharing Agreement.

* Minimal Reporting and Disclosure Requirements.

* Stockholders are not Public Record.

Others states that do not levy certain taxes also do not share information with the Internal Revenue Service, primarily because they do not gather the data. But why would Nevada advertise this as an incentive except to encourage people to think they could get away with something?

I put the question to Heller’s office.

“Well, I agree with you, it sort of implies something,” said one underling, who I will protect from retribution by not naming. I was referred to another state employee who said, “Aw, it’s just a sales technique.” I persisted and was referred to another person, who said, “Well, this is the last of the frontier here, and we like to keep that image, you know.”

Indeed, I think I do. If you need to cut corners on your taxes, Nevada is the place for you.

Nevada officials stopped returning my calls. So I phoned the IRS.

“First I’ve heard of it,” a spokesman said. “I’ll refer it to our enforcement people.”

Frankly, I know the IRS is too busy and understaffed to investigate a whole state. But it cheered me up to hear him say it.

And what about these “minimal” disclosure requirements? And the provision of law that allows stockholders to remain secret?

I put the question to the state Commission on Economic Development.

A representative provided an explanatory for-instance, which I paraphrase:

Suppose you work at a biotech company and you make a breakthrough with new medicine. Suppose that’s not enough of an achievement for you. Suppose you want to take your knowledge and start your own competing company on the side? Suppose you don’t want your partners at the first company to know?

I think he meant to say that if you’re a double-crosser, Nevada beckons.

Next time I do business and I see “incorporated in Nevada,” I’ll ask myself why. Do you suppose they went to Nevada just for the fun of it?