I-Team: Huge Tech Firms Come to Nevada to Avoid Corporate Taxes

I-Team: Huge Tech Firms Come to Nevada to Avoid Corporate Taxes

RENO, Nev. -- Nevada's economy gets chastised for essentially being nothing more than casinos and mines. However, there is a little known group of highly influential and powerful technology companies in the Silver State. You might even be using their products right now.

They come to Nevada mostly for one simple reason: no taxes. Up north in Reno, very intentionally and very quietly, there's billions of dollars changing hands in the most unlikely of places.

"They want to be private," said Stan Thomas with the Economic Development Authority of Western Nevada. "The no corporate income tax is very important, especially coming from California."

Thomas says dozens of companies are crossing borders in California and Washington to save their bottom line. Nevada has no corporate profits tax and no capital gains taxes. That's a huge draw for some of the largest companies in the world, like Microsoft.

Jeff Reifman is a former Microsoft program manager. His website, Microsoft Tax Dodge, blasts the Redmond, Washington-based company for sending their massive software licensing division to Reno. Instead of paying Washington state tax for a Washington state company, they pay nothing there and nothing here. It hasn't been easy to bring this to light.

"Corporations have the rights of people under our law, and so Washington state protects the privacy of corporations so a lot of this information is impossible to get," said Reifman.

The Licensing Division is in a large building in Reno. Employees volunteer in the community and try to have a presence, but taxes are a touchy subject. As soon as 8 News NOW mentioned we wanted to talk about corporate policy, the invite for a tour was denied.

Stan Thomas, though, says the weather, people and education are big draws, but the magnet is still money.

"You're doing over $1 billion in revenue and you're being taxed at 4 percent business tax up in the state of Washington. That was a no-brainer for them to come down here," he said.

While Microsoft is clearly in Reno to stay, another company quietly has a smaller footprint: Braeburn Capital. Braeburn is a type of apple, and it is a play on words, too. When you try to go to their website, you get the largest technology company on the planet, Apple Computers, partially based in Nevada.

It is a non-descript building on the west side of Reno that you wouldn't know has any connection to Apple whatsoever. For them, no press is good press. Apple refused to comment about whether Braeburn even exists and their Reno office door was locked and no one answered. But their corporate filings tell the tale.

Braeburn's corporate officers are actually Apple executives and lawyers, presumably in Cupertino, California, and not the Biggest Little City in the World.

Thomas says Apple's role in Reno is essentially unknown. Multiple press accounts label Braeburn as a investment arm of the company, keeping untold profits out of California to avoid taxes and giving little to Nevada but a tiny office, and all of it is legal.

Thomas has no idea how many jobs the company has created, saying they have kept their business dealings quiet.

Secretary of State Ross Miller is one of Nevada business champions. He proudly lures companies here, but wants real investment, not the perception of Reno acting as Nevada's Cayman Islands.

"That clearly isn't the path towards true economic development," he said. "We have promoted ourselves entirely on being a cheap date and that's not going to work. We have to become more strategic about economic development."

It's a fine line to get companies to pay their fair share, but if California companies can avoid nearly 20 percent in taxes, they'll do it, and Nevada makes it easy. But the state may get only subtle secrets in return.