Tax break denied for big company expanding in Vegas

Thursday, Sept. 14, 2000 | 11:29 a.m.

CARSON CITY -- The nation's largest food distribution company failed Wednesday in its effort to get a tax break from the state of more than $525,000 to locate a plant in Clark County.

The state Economic Development Commission denied the application of Sysco Corp., which envisions a $25 million plant either in North Las Vegas or Henderson with an initial 420 employees.

The company, which generated national sales of $19.3 billion last fiscal year, sought to escape $444,749 in sales tax on the equipment it would purchase and $84,000 over four years in payments of the business tax.

Commissioner Peter Thomas of Las Vegas called Sysco an "impressive company" but said it doesn't meet the qualifications for the tax benefit.

To be eligible, most of the plant's revenue must come from outside the Las Vegas area. But the Sysco plant would compete with local companies in distributing food to restaurants, casinos, hospitals, nursing homes and schools.

The business is moving into Las Vegas to serve that market, plus parts of Utah and Arizona. But its primary business would be in Las Vegas.

John Carlson, a vice president for Sysco, stressed it would be providing new jobs in Las Vegas with the average wage of $23 an hour. There are about 100 drivers and salesmen in Las Vegas now and another 300 people would be hired. Within five years, there would probably be 1,000 employees.

Carlson said Sysco was "ready to plant a flag (in Nevada) and we bring growth and highly compensated employees."

Commissioner Berlyn Miller of Las Vegas agreed Sysco was a "great company," but said it does not meet the standards set by the Legislature in establishing tax break programs.

The commission did permit Sysco to defer payment of $169,428 in sales tax to a later date. But the company will eventually have to pay that amount.

After the vote, Carlson said he was "somewhat disappointed," but indicated the company still intends to locate in Las Vegas. He said he will return to the commission with a request for a grant to help train the new employees the firm will hire.

In other applications, the commission voted for a $288,000 break from the sales and business taxes for Powertrusion 2000 International Inc., which will manufacture utility poles in Las Vegas with 98 percent of the sales out-of-state. It will have 36 jobs with an average hourly wage of $17.66. The commission also allowed it to defer paying $107,061 in sales tax

Daryl Turner, chairman of the board of Powertrusion, said it is renting space in North Las Vegas at the corner of Cheyenne and Lamb Boulevard. But it plans to build a plant near the Post Office Distribution Center.

Tririga Inc., a software development company in Las Vegas, received an exemption of $350,000 from its sales and business tax and it will get to defer paying $117,830 in sales tax on the equipment it purchases.

Most of its sales will be outside of Nevada and it now employs about 100 workers. The average wage is $30 an hour.

Duane Ellis, controller of the firm, said its product is sold over the Internet.

Thomas said this is a high-tech company and hopefully those in Silicon Valley in California will see that these types of companies can be located in Las Vegas.

Sunshine Fresh Inc., which makes and distributes pickles, sauerkraut and pickled tomatoes, received a $14,000 abatement on its sales and business taxes. And it was allowed to postpone payment of $5,000 in sales taxes.

Sunshine, headquartered in New Jersey, is located in North Las Vegas and will create eight new jobs with an average wage of $16 an hour. Eighty percent of its business will be out of state.