(Michael Chamberlain/Nevada Business Coalition) – The Judiciary Committee today listened to arguments about AB78, which would raise fines for failure to purchase or renew state business licenses. The new fines would range from $1,000 to $10,000.
If we ever wanted to discourage small businesses from starting up in Nevada, this is one way to do it. A simple clerical error has the potential to drive many of them out of business. In the wake of the worst recession in decades and the cry from residents across the political spectrum to encourage business in the state, it is unbelievable that this is even being considered.
Current law allows the Secretary of State to impose fines on those businesses that willfully refuse to renew or obtain a license, but this proposal would allow fines to be collected if the business failed to obtain the license for any reason. In addition, the Secretary of State may enlist the services of the Attorney General or local district attorney to go after the violator, which could result in even higher costs.
The state of Nevada spends more than $100,000 each year attempting to convince businesses to incorporate in the state. Most of us have probably heard radio commercials when traveling that advertise Nevada as the place to incorporate. Because of our appealing business climate, we compete with Delaware as one of the most attractive places in the country for companies to incorporate. The prospect of having to pay such exorbitant fees could erase any other advantages the Silver State may have over other states in this regard. We may as well put up a sign saying, “Closed for Business.”
AB78 will hurt small businesses and harm the state’s efforts to attract businesses to incorporate here. It is an unnecessary, misguided piece of legislation that will discourage businesses at a time in which we should be doing all we can to encourage them.
What can you do? Let the Legislature know your opinion.
Click here, select “AB78″ in the drop-down menu, click on “Against” and enter your information in “Constituent Information.”
(Michael Chamberlain is Executive Director of Nevada Business Coalition.)