Internet game software maker, furniture company get tax breaks

An Internet game software company owned by IAC/InterActive Corp. and a contract furniture company based in Canada won tax breaks Tuesday for new businesses in Las Vegas.

The Nevada Commission on Economic Development approved sales tax reductions and other tax savings for Foliot Furniture Pacific Inc., which is affiliated with a Montreal company of a similar name, and InstantAction Inc., which is a subsidiary of $5 billion-revenue IAC/InterActive.

Louis Castle, former general manager of the Westwood Studios video game company in Las Vegas, is bringing InstantAction Inc. to the city. Westwood started as a two-person company in a garage and grew to 250 employees in two states before it was sold, Castle told the commission.

Barry Diller, chairman and chief executive officer of IAC/Interactive, hired Castle to be CEO of InstantAction. The IAC/Interactive subsidiary had been called GarageGames and was based in Eugene, Ore.

Part of the operations are being moved to Portland, Ore., but Las Vegas will be headquarters for InstantAction, said Chief Financial Officer Richard Land. Offices are at 9900 Covington Cross Drive.

The company has three product lines.

The first line makes Internet games that can be played on Facebook, Yahoo, YouTube and other websites.

The games are free, but InstantAction sells virtual items that players can use in the games.

The Portland operation creates software that makes games from other companies more accessible on the Internet.

The Torque Game Engine provides basic software tools that independent game developers can use to create games.

InstantActon has 45 employees in Las Vegas and will have about 70 by the end of the year. The average salary is about $80,000 and will increase as higher-level employees are hired, Castle said.

Most of the workers come from San Francisco, Southern California and Austin, Texas, Castle said.

"We have very generous benefit packages because of competition for talent," Castle said.

Foliot Furniture is establishing a 309,000-square-foot furniture manufacturing and showroom at 7000 Placid St. near McCarran International Airport. The company is investing $5 million in plant and equipment in Las Vegas.

The company employs 36 workers and intends to reach 100 employees by June and top 400 workers in a few years, company managers said.

Foliot Furniture makes furniture for college dormitories, the military and hotels. The average hourly pay will be $15.49 plus medical and dental benefits, according to papers filed with the commission.

In addition to factory workers, the West Coast sales force will operate out of Las Vegas, company President Daniel Foliot told the commission during a meeting held by teleconference at the Sawyer Building and in Carson City.

"We're probably one of the only furniture manufacturers growing in North America, and we're very proud of that," Foliot said. Many furniture makers have moved offshore.

The privately owned company was founded in 1994 and has a 250,000-square-foot plant in Montreal and a 150,000-square-foot plant in Greenville, Tenn.

The commission agreed to cut sales taxes to 2 percent, saving Foliot Furniture $298,000. The modified business tax will be cut by half for four years for $56,000 in savings.

Foliot Furniture was authorized to defer payment of the remaining $98,000 in sales taxes for six years.

InstantAction received a $30,000 reduction in sales tax and $113,000 reduction in modified business tax. It was allowed to defer payment of $10,000 in the balance of sales tax.

The Nevada Development Authority recommended tax benefits for the two companies, but authority chief executive Somer Hollingsworth said his team isn't always successful.

Kohl's decided to establish back office operations in Dallas, rather than Southern Nevada, because Dallas gave the company $750,000 in cash.

Contact reporter John G. Edwards at
jedwards@reviewjournal.com or 702-383-0420.