The State of Nevada, through the Governor’s Office of Economic Development (GOED), offers a variety of tax abatements to encourage companies to either start up in Nevada or move here from another state. According to the GOED website, “Tax abatements are a reduction of taxes granted by a government entity to a company for a specific period to encourage economic development. Businesses that receive tax abatements still pay taxes, but at a discounted rate.”
These abatements include a reduction in the percentage charged for sales and use taxes, modified business taxes, personal property taxes, and others. Companies that apply for abatements must meet certain criteria, such as job creation, average wage, capital investment, and medical benefits for employees.
Abatements can be an important tool in competing with other states for new businesses, their tax revenues, and their economic impact. Tom Burns, executive director of GOED, explained, “Economic development is very much a contact sport in a number of ways, and it’s pretty aggressive. We compete a lot against Arizona, New Mexico, Texas, and other states for deals and opportunities.”
Taylor Adams, president and CEO of Economic Development Authority of Western Nevada (EDAWN), explained, “Nevada offers abatements and not incentives. Many states with whom we compete do offer cash incentives, which are based on a percentage of what the state expects to receive in tax revenue over a period of time. In Nevada, we don’t have many of the taxes that other states do, so it’s impossible for us to provide tax-based incentives on taxes that don’t exist.” Unlike many other states, Nevada has no corporate income tax, no inventory/floor tax, no franchise tax, no unitary tax, and no intangibles tax.
EDAWN is one of eight regional development authorities in Nevada, with each one responsible for a specific geographical area. EDAWN covers Washoe County, which includes Reno, Sparks and the Tahoe area. “In other states where I’ve worked, the incentive is the only conversation,” said Adams. “Because Nevada is such a low-tax state where we don’t have cash incentives, our office has a critical responsibility to communicate all the benefits associated with being in Nevada.”
Las Vegas Global Economic Alliance (LVGEA) is the regional development agency for Clark County. “It is our job to work with businesses that are in the region looking to expand, trying to retain them, and also attract new ones,” said Danielle Casey, president and CEO of LVGEA. “We partner with GOED in educating companies and businesses on incentives. It is our job to work with companies and help them evaluate abatements, determine what they would qualify for, and then be the channel in the pass-through that helps them apply to the state for those abatements.”
Nevada’s Strengths and Weaknesses
Nevada’s economic development authorities are tasked with promoting the benefits of locating a business in Nevada, as well as finding ways to work around areas in which the Silver State is at a comparative disadvantage. Besides the lack of business taxes charged by many other states, it also offers tax benefits for business owners on a personal level: no personal income tax, no inheritance tax, no estate tax, and no capital gains tax.
“We use the size of our state to our advantage,” said Burns. “Being a relatively small state can have its advantages. We’re pretty nimble.” He explained that being able to meet directly with government regulators can increase speed to market. “When I’m meeting with companies, I tell them the most important thing I can do is get you up and running, making your widgets and selling them. The fact that I can get you up 90 days to 120 days or six months faster than you can do it in other places means money and success for you.” Adams agreed, saying, “Our speed to market is our superpower when it comes to project delivery. We do better at getting projects entitled and built than any other state in the country.”
Nevada’s location is also a big advantage. The greater Reno-Sparks area is within one-day truck service to over 60 million customers and two-day truck service to 11 states. The Las Vegas area has easy access to five major U.S. ports, and more than 64 million people live within a one-day trucking radius. “We’re located right on the border of the fifth largest economy in the world, but we don’t have near the tax environment or the regulatory environment of our friends to the west,” said Burns. “You’re only four hours away from the port of Los Angeles or the port of Oakland, so you can be very close to those resources and not have to deal with those additional burdens. Both southern and northern Nevada have major arterials running through the heart of their cities that connect us with the rest of the country. If you need the ability to get your product to the rest of the United States, we’re a prime location.”
Setting up a corporation in Nevada is easy, compared to other states. “We have one of the most business-friendly, if not the most business-friendly, corporate codes in America,” said Adams. “People sometimes refer to Nevada as ‘the Delaware of the West’ from a corporate code standpoint. In the not-too-distant future, I believe people will refer to Delaware as ‘the Nevada of the East’ because we’ve moved ahead of them.”
With all these advantages, Nevada also faces challenges in attracting new or expanding businesses. The fact that more than 85 percent of the state is owned by the federal government means available real estate, especially for companies that need a large footprint, can be a chokepoint. “Availability of land is a challenge,” said Burns. “It’s something that we’re working on, and we have strong support and cooperation from our delegation in D.C. It takes a lot of work and a lot of conversation to make our East Coast legislators understand why we’re asking for large pieces of land [from the BLM], what that means to the state and how big Nevada really is.”
Casey noted that availability of a trained workforce is a critical issue in every market. “When you look at the rankings that site selection consultants share regularly, one of the top issues is always, ‘Do you have the workforce, can you show me that you can build the workforce or help me attract the workforce to serve my business?’ Companies truly are chasing talent,” she said. “If we look at our percentage of population with bachelor’s degree or higher, we are below 30 percent, while places like Denver and Nashville are well above 40 percent. It is a consideration for companies that require a college-educated workforce.”
Which Industries Are a Good Fit?
Economic development authorities across the state are targeting industries that would be a good fit for Nevada. “We’ll be making a big push into the critical mineral space,” said Burns. “The Department of War identified 60 critical minerals as they relate to the defense supply chain and the economic supply chain, and 36 of those are mined in Nevada. For example, there’s a mine under development in Esmeralda County called Ioneer. It’s a lithium mine with a significant amount of boron, which is used in making items for the defense world. We think we’ll have about 20 percent of the world’s supply when that mine opens up.”
Aerospace and the drone industry present another opportunity, according to Burns. “We think there’s great ability to partner with Nellis Air Force Base and Creech and Fallon Naval Air Station,” he said. “Given the open terrain we have and the percentage of our state that’s owned by the federal government, let’s figure out a way to take that big lemon and make lemonade. One way to do that is to use that open space to test those kinds of things and drive testing and manufacturing of those products in Nevada.”
Casey said LVGEA is also investigating the possibilities around defense-related companies, including eVTOLs (electric vertical takeoff and landing aircraft). “Drone technology, satellite technology, all of those things are very easily testable,” she said. “Nevada has a very long history and deep expertise and assets in aerospace and defense, so we are taking a deep look at that.”
Economic development agencies are also investigating health-related and bio-tech companies, processed food manufacturers, logistics and distribution companies, advanced manufacturing, FinTech, and renewable energy companies, to name just a few.
Major Companies Move to Nevada
EDAWN recently announced that Buckeye Corrugated, a national provider of corrugated packaging and displays, has expanded into Washoe County from Ohio, bringing 50 high-wage jobs and $14 million in capital investment. Amperesand, which delivers infrastructure solutions powered by solid-state transformer technology, represents more than 60 high-wage jobs and $18 million in capital investment. Home-grown company SendCutSend has also announced an expansion. “What began as a startup here has grown into a nationally recognized digital manufacturing platform,” said Adams. Future Form Manufacturing, based in Sparks, is tripling production capacity to meet growing demand for data center infrastructure products.
Tesla is expanding its footprint in northern Nevada with a semi-truck manufacturing plant. GOED estimates it will bring in 3,500 jobs when completed. “In addition to the Tesla facility, [northern Nevada] has experienced significant investment in the data center area,” said Burns. “Also on the tech front, a Fernley company, Positron, competes with NVIDIA, developing graphics processing units (GPUs) that power AI.”
LVGEA recently helped a large manufacturer expand into southern Nevada. “Welspun USA is a textiles leader with a global presence in 50 countries and 26,000 employees total,” said Casey. Welspun will be manufacturing pillows in a plant in North Las Vegas. Another newcomer to southern Nevada is DieselCore, a supplier and distributor of diesel engines and parts. In Henderson, Haas Automation, the largest machine tool builder in the western world, is expanding its manufacturing capacity with a second factory spanning 2.4 million square feet.
Economic Development Aids Two Major Tech Companies
CENTRA Digital, a national company with data centers in four other states, operates one data center in downtown Reno and is developing another one. Bryson Hopkins, VP, Technology & Ecosystem Development for CENTRA Digital, calls these “state-of-the-art, neutral connectivity hubs.” He explained, “Our particular subset of the industry is what’s called retail co-location. We sell the space in our data center, and then provide power and connectivity – the fiber optic cables that connect people together.”
Hopkins said, “We’re seeing a tremendous amount of new connectivity getting built over the mountains from Silicon Valley to Reno. From a fiber perspective, the connection from Reno to Silicon Valley is only about four to six milliseconds. You can jump over the mountain and save money. You’re in a better climate zone, there’s available space and available power.”
CENTRA’s first data center, located at 200 South Virginia Street, opened in 2024, and the second, at 265 Keystone, is due to go online later this year. CENTRA approached EDAWN for help with abatements for the second facility. “Everybody we’ve worked with at EDAWN has been great, very receptive and very helpful. NNDA (Northern Nevada Development Authority) has been helpful as well,” said Hopkins. “Being outsiders, we didn’t know the right people to talk to, and they were great at helping us navigate that process. We got introduced to people not only in the City Council, but also the Planning Commission.”
TensorWave is a cloud computing company that specializes in providing high-performance infrastructure specifically for AI workloads. The company was founded in 2023 by Piotr Tomasik, a graduate of UNLV’s College of Engineering. TensorWave operates data centers in Miami and Tucson, but it’s headquartered in Las Vegas, where it has corporate staff, corporate functions, executive management, and R & D. Tomasik, who now serves as company president, said the company plans eventually to open a data center in Las Vegas, as well.
“We’re like a utility company for AI,” explained Tomasik. “When you come home, you flip on a switch and expect the lights to come on because the utility company is running everything seamlessly and reliably in the back end. When frontier models (i.e. OpenAI, Anthropic), enterprise companies (i.e. Google, Microsoft), and high growth AI startups want to run their models, they want to turn them on like a switch and not worry if they’ll run into issues, if something will break, or if there’s enough power to run them. That’s what we take care of.”
To support its expansion, TensorWave worked closely with LVGEA to receive tax abatements from GOED. “Heather Brown and the LVGEA team were exceptional,” he said. “What made the biggest difference for me was that they didn’t just hand us a brochure. Heather made introductions, explained how things got done, and connected us with the right people. One of the most valuable things she did was help facilitate a meeting with the governor, where we had the opportunity to share our vision for TensorWave with him, so he could understand what we’re building and set the tone for our relationship with the state. It signaled that Nevada was genuinely interested in us.”
Tomasik said he chose to headquarter his company in Las Vegas for many reasons besides being a long-time resident. “Nevada’s tax structure is attractive,” he said. “The legislative predictability is great in the data center and AI business. We’re making long-term capital commitments, so knowing that the regulatory environment doesn’t shift dramatically is essential for us. There’s less red tape and more collaborative government agencies than elsewhere.”
How Important Are incentives?
Casey said incentives like abatements are necessary when all other things are equal. “If a company has a strong competitive reason for being in our market versus one or two other markets, incentives can basically push it over the cliff in terms of being the obvious right selection,” she said. “However, Incentives don’t turn a project that’s bad for the market into a good one.”
“Only about a third of the companies that EDAWN has recruited in the last two and a half years have even applied for an abatement,” said Adams. “We’re proud of that number because that means they’re choosing us because they know that we’re the right community for their company, I think there’s a perception that every company we recruit is getting this huge abatement and not contributing to the economy. Nothing could be further from the truth. The companies are coming here because they believe in our state. They’re coming here because they want to have the quality of life and the freedoms, but also the business-friendly environment that Nevada offers, whether there’s an abatement or not. These are companies that are coming here because they believe this is the right place for their business to grow and scale.”
