The state Commission on Economic Development on Wednesday approved tax breaks totaling nearly $750,000 to keep Harley-Davidson Financial Services from leaving Carson City.
The company, which provides financing and insurance services for Harley buyers and dealers, employs 425 and plans to build a new office building. But it threatened to move the operation to Texas unless it gets help defraying some of the cost of new taxes imposed by the 2003 Legislature.
The company is one that must pay the new 2 percent employee payroll tax levied on financial institutions, which will cost it more than $300,000 a year. Harley-Davidson representatives Don Hummer and Mike Sulentic described their company as "good corporate citizens" who are involved in the community, contribute to local causes and charities, and pay good wages -- an average of $17 an hour.
Sulentic told the commission the corporation's lease ends in November 2004, and it wants to be in a new building somewhere by then.
"A critical component is that we can come to an agreement on both the property tax and the sales tax," he said.
The Legislature authorized the commission to give companies, particularly those moving to or expanding in Nevada, tax breaks to make sure they come or remain here.
Sen. Mark Amodei, R-Carson City, told the commission the tax breaks are vital to keep a major employer in Carson City and to show that the tax increases approved by lawmakers "didn't destroy the business community in this state."
He was joined by Assemblyman Ron Knecht, R-Carson City, who said keeping Harley-Davidson Financial will help prove to other companies looking at Nevada that the state is still a great place to bring their business.
The Carson City Board of Supervisors sent a letter supporting the breaks.
Tax commissioner Pete Thomas said the request was an exception to the guidelines since it doesn't guarantee adding any new employees, "but I think this is justifiable."
"But lest we open up the floodgates, I want to highlight that this is an exception," he said.
The commission approved a 50 percent abatement of personal property taxes for the next 10 years -- which will save Harley-Davidson Financial an estimated $221,967. It also approved a sales tax abatement on the estimated $10.45 million in equipment planned for the new building, saving the company another $522,500 in taxes.
In addition, the commission gave its blessing to tax breaks for Sherwin Williams, the nation's largest paint manufacturer, if the company decides to build its plant in Storey or Lyon counties.
Company spokesman Joseph Timmons told the commission plans are for a $40 million plant employing 84 at an average wage of nearly $17 an hour.
The property and sales tax breaks will save Sherwin Williams an estimated $2.2 million if the company decides to locate in western Nevada. Timmons said Nevada is competing with Utah for the plant. A decision will be made before the end of the year.
Finally, the commission agreed to a total of some $40,000 in tax breaks for PC Doctor, a software company based in Emmoryville, Calif. Chuck Alvey of the Economic Development Authority of Western Nevada said it has 49 employees and pays more than $20 an hour. He said the company will probably locate in south Reno.
