Nevada is no place to start

Nevada's business of creating businesses is down, not surprisingly, because of the recession.

Secretary of State Ross Miller said new entity filings, including incorporations, partnerships and limited liability companies, dropped 25 percent over the past two years.

New entity filings totaled 72,893 in the 2008 fiscal year and slipped to 62,907 the following year. For the fiscal year ending in June, the total is 54,932, or a quarter less than two years ago.

The slump not only reflects the Nevada recession but also the decline in economic activity nationally, because many businesses that incorporate in Nevada do business in other states.

"We're truly a national incorporating state, and it's going to reflect the economy of the country as a whole," Miller said.

Nevada competes with Delaware in trying to earn fees from registering corporations, and Delaware has noticed a similar drop in new-company formations, Miller said.

On the other hand, many developers created limited liability companies for projects in Nevada, and the number of these companies has plunged with the collapse in the real estate industry, he said.

Nevada's state government receives the revenue from fees the department charges corporations, partnerships and limited liability companies for these filings. So the decline in business entity revenues hurts the state in the pocketbook.

The secretary of state's office collected $82.8 million in the 2008 fiscal year but only $74.7 million in 2009. The total for the just-ended 2010 fiscal year was $107.6 million, but that includes $37.5 million in revenue from business license fees collections since Oct. 1. Before that, the Department of Taxation collected business license fees.

Revenues excluding business license fees totaled $70.1 million, a few million dollars less than in the prior fiscal year.

State statistics show no sign of a recovery in recent months, either. New business entity filings dropped about 9 percent in June, July and August, compared with the same period last year.

Renewals of corporations and business entity registrations dipped 2 percent.

When other fees are included, however, revenues are up a little bit, said Scott Anderson, deputy secretary of state for commercial recordings.

Anderson had no comparison for business license collections since Oct. 1, but he said it's up some. The secretary of state's office now has linked business tax fees with business entity recordings so that it can send notices to businesses that have failed to pay for business licenses.

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