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The Elon Musk effect: Why more businesses want to incorporate in Nevada

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The Elon Musk effect: Why more businesses want to incorporate in Nevada


Elon Musk’s businesses have been planting roots in Nevada for years now. But after the billionaire faced a legal hurdle in Delaware — the country’s capital for the legal homes of corporations and other business entities — he made his preferences clear.

“I recommend incorporating in Nevada or Texas if you prefer shareholders to decide matters,” Musk posted Jan. 30 on his social media platform X, formerly known as Twitter. A Delaware judge had invalidated his $55.8 billion pay package as CEO of Tesla that day.

Weeks later, another billionaire with deepening ties to Nevada had an incorporation win. A Delaware judge ruled in late February that Tripadvisor Inc., the online review and booking site whose controlling shareholder is Formula One’s Greg Maffei, could move its incorporation to the Silver State, despite a legal challenge from shareholders.

Nevada is getting more attention from business entities looking to establish or reincorporate in the state, which doesn’t require moving their physical headquarters.

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There were more than 108,000 business entities registered in Nevada in 2023, a roughly 150 percent increase from 2019, according to data from the Secretary of State’s Office. While small businesses make up much of the growth, industry and state officials say the high-profile attention could bring more big names, additional state revenue and maybe even a more diverse economy in the long term.

“Once they realize the benefits of incorporating in Nevada, they’ll start to realize how supportive Nevada is of business and business growth,” Secretary of State Cisco Aguilar said. “(Then) they may even physically consider moving here, which brings jobs, it brings investment and it brings us resources to invest in all the infrastructure that Nevada citizens care about.”

Nevada’s corporate landscape

Delaware has long led the U.S. corporate sphere for its tax policies and depth of case law — 68.2 percent of Fortune 500 companies call the eastern state their legal home. But other states, like Nevada and Texas, have spent decades working to attract some businesses to the state through statutes that provide alternative legal protections for officers and controlling shareholders.

“If we’re running a race, Delaware is in the lead, but Nevada is second,” said Benjamin Edwards, a corporate law professor at UNLV. “We’re not nipping at Delaware’s heels. They’ve probably lapped us a couple times.”

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Recent decisions, such as the ruling on Musk’s compensation package, have put those options at center stage. About two weeks after the Delaware Chancery Court’s decision, Musk moved his brain implant company Neuralink’s legal home to Nevada.

Experts say the differences come from greater focus on shareholders in Delaware. Courts and law there put more emphasis on protecting shareholder value, meaning a company’s officer could be sued for things like gross negligence. Statutes in Nevada give those officers far more protections — in most cases, one would face personal liability for fraud.

“What Nevada did is we went further than Delaware, and it’s one of those reasons why people are actively considering Nevada over Delaware these days,” said Michael Bonner, a Las Vegas shareholder at the law firm Greenberg Traurig LLP. “Believe me, it’s still a consideration. Many, many people will still select Delaware.”

Industry members in the state frame it as an insurance policy for the limited liability companies, corporations and other business entities they work with. Cort Christie, CEO and founder of business services firm Nevada Corporate Headquarters, said small businesses — which make up a large majority of state filings as LLCs — consider incorporation in Nevada for the legal protections.

“It’s kind of like all of us can choose the levels of auto insurance that we want, and we’re broke,” Christie said. “We’re gonna choose the lowest limits that we can to save as much money as possible. But we all know that if you get into a bad accident, there can be risks with that and potential lawsuits that come out of that as well, so you want to be properly insured.“

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Impact on Nevadans

Business entities aren’t just considering Nevada for its greater liability shield. Others coming from Delaware are looking to save money, according to filings from some publicly traded companies.

Laird Superfood, a plant-based food producer physically headquartered in Boulder, Colorado, reincorporated in Nevada on Dec. 31. In a filing with the U.S. Securities and Exchange Commission before the shareholder vote, it told investors that it expected to pay about $200,000 in Delaware taxes for that fiscal year. By contrast, Laird’s Nevada annual fees are expected to be about $700, according to the filing. Nevada doesn’t have corporate taxes.

Similarly, Tripadvisor’s April 2023 proxy statement to its investors said it paid $250,725 in Delaware taxes in the 2022 fiscal year and would likely pay around $1,725 in annual fees in Nevada.

Despite any rising trends, the average Nevadan may not see immediate changes as more business entities file in the state. Aguilar, whose office oversees business licensing, said the state benefits by generating additional revenue added to the general fund, providing funding later for road projects and other state services.

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New registration revenue and other annual fees for corporations and sole proprieterships generated $183.4 million in 2023, according to the state. That’s a 150 percent increase from the nearly $72 million generated in 2019. A spokesperson for Aguilar’s office said the commercial recordings division also generates revenue for the state’s general fund.

Aguilar’s office is determined to work with business owners small and large to improve the process and environment for businesses. Officials are working on a $15 million overhaul to SilverFlume, the state business portal, with the goal of making it usable without the help of a lawyer by mid-2025. Intended improvements include reducing bugs, modernizing the look, increased self-help options and adding functions like automatic license renewals.

In recent weeks, Aguilar said he’s fielded more calls from businesspeople interested in Nevada incorporation. He declined to specify which firms are interested, but he said many of the major shareholders calling already live in Nevada and are inquiring about the state’s differences and the reincorporation process.

“It’s for free advertising for somebody like Elon to talk about the benefits of Nevada,” Aguilar said. “People listen to what he says. And when he speaks, especially from a business perspective, people listen. Then they start asking questions of their own companies: Does it make sense for us to be here, or should we be in Nevada?”

McKenna Ross is a corps member with Report for America, a national service program that places journalists into local newsrooms. Contact her at mross@reviewjournal.com. Follow @mckenna_ross_ on X.

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Nevada

Lt. Gov. Anthony forms task force to bar trans athletes in women’s sports

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Lt. Gov. Anthony forms task force to bar trans athletes in women’s sports


Nevada’s lieutenant governor formed a task force this week aimed at preventing transgender women and girls from participating in women’s sports and exploring how to create fair competition for the sexes.

Reached by phone Friday, Republican Stavros Anthony said he formed the “Lieutenant Governor’s Task Force to Protect Women’s Sports” to address what he described as potential unfairness from women and girl’s playing in athletic competitions against transgender female athletes.

“I wanted a very focused laser beam working together approach in the state of Nevada to make sure that we ban biological men playing in women’s sports,” he said.

Anthony said he didn’t know how many trans athletes play in Nevada, but he has “been told” that there are high school and college players. He said he didn’t believe the effort was wading into “transgender issues.” Instead, he said the task force is focused on biological sex.

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The purpose of the task force will be to “promote policies that prioritize fairness, protect women’s safe spaces, uphold opportunities for women, and preserve the integrity of competition,” according to the Tuesday announcement. Anthony said the task force will meet, host town halls and rallies on the issue to spread awareness and hear opposing views.

Anthony said he was spurred to create the task force following the controversy faced by University of Nevada, Reno’s volleyball team. In October, the team forfeited a game against the San Jose State Spartans because of allegations of a transgender player on the team. UNR did not have enough players to compete because “a majority” of players said they would sit out in protest of the participation of transgender women in sports.

The task force’s chair will be Marshi Smith, a Henderson resident, former college athlete and co-founder of the Independent Council on Women’s Sports. Other members of the 11-person group include Sen. Carrie Buck, R-Henderson; Assemblyman Bert Gurr, R-Elko; Nevada System of Higher Education Regent Stephanie Goodman and Washoe County Commissioner Clara Andriola.

Buck said she intends to introduce legislation that would promote transparency in athletic leagues. It would create co-ed leagues at the high school and collegiate levels and would require female leagues to inform athletes that the league may have transwomen teammates or competitors. She said the bill is still being drafted.

“I have empathy for those that are transitioning,” Buck said. “But inevitably, I also feel for that biological girl that is competing in the sport and is just going to be taken out because men are better at some sports.”

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Advocates push back

LGBTQ advocacy groups described the task force as an attack on transgender Nevadans and a political move. Andre Wade, Silver State Equality’s state director, called it a losing strategy and said youth sports participation should be available to all.

“Our schools should be focused on providing the best possible education and helping to improve the well-being of all students, not actively harming students’ mental health and creating a hostile environment by singling out certain individuals,” Wade said in a statement. “Every child deserves equal access to these opportunities.”

It’s not clear how many transgender student athletes participate in Nevada sports. In a December Senate hearing, NCAA President Charlie Baker said there are fewer than 10 transgender athletes he’s aware of competing in collegiate sports.

Athar Haseebullah, executive director of the American Civil Liberties Union of Nevada, said he didn’t expect the proposals from task force members and conservatives broadly to become policy in Nevada because of the Democratic-controlled Legislature and state Equal Rights Amendment protections voters added to the Nevada Constitution in 2022. He also argued that trans athletes playing in girls’ and women’s leagues are rare.

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He said he suspects the topic has received so much attention because of its place in “culture wars.”

“There’s been tens of millions of dollars across the country poured into attempting to paint every trans athlete, effectively, as LeBron James in drag, which is the furthest thing from reality and what’s happening across the country,” Haseebullah said.

“I think the majority of legislators that I’ve spoken to are focused on fixing public education.”

Despite its low prevalence, the issue continues to be top of mind for both parties. A federal judge blocked the Biden administration’s attempt to strengthen Title IX protections based on sexual orientation and gender identity in a ruling on Thursday, ruling the Education Department had overstepped on sex discrimination and First Amendment grounds.

More than half of states ban of transgender girls and women participating in sports aligned with their gender identity through legislation or state rules, according to the Movement Advancement Project think tank.

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A 2020 Idaho ban – which included a sex dispute verification process that would require someone to undergo medical exams to verify their sex — faced an injunction from the Ninth Circuit Court of Appeals. The June 2024 decision said it likely violated the Equal Protection Clause of the Fourteenth Amendment. The state has asked the U.S. Supreme Court to weigh in.

President-Elect Donald Trump has vowed to take up the issue through the executive branch.

Contact McKenna Ross at mross@reviewjournal.com. Follow @mckenna_ross_ on X.



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Rockies snowpack season for Colorado River basin off to rocky start

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Rockies snowpack season for Colorado River basin off to rocky start


It’s too early to make sweeping assessments of this year’s snowpack, but some signs point to a remarkably average year in the Rocky Mountains, where snow turns to water and flows down the Colorado River into ever-shrinking reservoirs.

Las Vegas residents make up a portion of the 40 million people who rely on yearly flows from the river to drink, bathe, water crops or lawns, and more. Southern Nevada sources about 90 percent of its water from Lake Mead — part of a fickle river system that’s becoming drier every year and would need several consecutive, above-average years of snow to recover.

“Even if we have a great snowpack year, the trends are that water supply is declining,” said Abby Burk, senior manager of The Audubon Society’s Western Rivers Program, who is based in Colorado. “We are burning through an increasingly shortened timeline by playing a zero-sum game.”

As of Thursday, the entirety of the Upper Colorado River Basin sat at 95 percent of a historical median, according to the U.S. Department of Agriculture’s Natural Resources Conservation Service.

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That’s not necessarily the start to the banner year that Las Vegas’ water managers were hoping for, though high snow numbers don’t always translate to elevated runoff levels, said Bronson Mack, a spokesman for the Southern Nevada Water Authority.

Hydrologists said last year was average, but 2022 and 2023 were widely regarded as stabilizing years for the Colorado River system, bringing Lake Mead up from its all-time low level reached in July 2022.

“The twenty-first century has taught us to not count our water — or snow — before it is in the reservoirs,” Mack said in a statement. “Good snowpack years have been foiled by poor runoff and bad snowpack years have been saved by late-spring storms.”

Rural, Northern Nevada in good shape so far

Snowpack numbers are most promising in the rest of Nevada, where cities like Reno depend on recharge to the Truckee River.

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With the exception of the Spring Mountains in Southern Nevada, all of the state’s basins that fuel rivers other than the Colorado were above 100 percent of the median as of Thursday.

Hints of snow in the Spring Mountains, which melts into runoff for Southern Nevada’s underground aquifers, are just beginning to show, with only 2 percent of the median.

“As you move north, things improve fairly quickly,” said Baker Perry, Nevada’s state climatologist and professor at the University of Nevada, Reno. “Northern Nevada is in pretty good shape from a snowpack standpoint: The numbers are generally well above the median.”

In much of rural Nevada, residents are dependent on groundwater wells rather than municipal water systems. Consistently poor snowpack and dry soil conditions could some day force well users to drill deeper to reach aquifers that become lower with less available water.

Climate change spells bad news

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A plethora of factors may prevent snowmelt from arriving in the Colorado River’s reservoirs.

One of those is soil dryness, said Burk, of The Audubon Society.

“Soil takes the first drink before water arrives in a stream,” she said.

Almost 47 percent of the Colorado River basin was experiencing drought conditions as of Thursday, according to the National Integrated Drought Information System.

That dryness is felt in Las Vegas, as well, with five months in a row of no measurable precipitation — the second-longest such streak on record, as reported by the state climatologist office’s January drought update released on Thursday.

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John Berggren, regional policy manager for nonprofit Western Resource Advocates, said other factors to keep in mind are how much precipitation falls as rain rather than snow and exactly when snowpack begins to turn into runoff.

Unfettered warming caused by climate change is causing snow to melt earlier, he said. That can cause vegetation to soak up water through evapotranspiration, the loss of water to evaporation from soil surfaces and transpiration from the leaves of plants.

“Because of climate change, snowpack numbers aren’t translating into the same stream flow numbers that we might have seen 10, 15, 20 or 30 years ago,” Berggren said.

Some years will see snowpack levels shrink early in the season, while other years start off slowly and bring snowstorms later on, he said.

“Fingers crossed for the latter, but we have to be prepared for the former,” Berggren said.

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Contact Alan Halaly at ahalaly@reviewjournal.com. Follow @AlanHalaly on X.



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Nevada fuel line will return to normal service

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Nevada fuel line will return to normal service


LAS VEGAS, Nev. (FOX5) – Clark County asks consumers to ”not panic buy at the pump.”

After messages from Clark County saying the fires in California were potentially affecting the fuel lines servicing Southern Nevada, the County is advising the public to not run out and buy gas for their cars.

The gas line from California to Nevada will re-start and be operational by Friday.

Message from Clark County:

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“In working with California, a solution has been put in place which will power the Kinder Morgan fuel line into southern Nevada and fuel should start to flow into the valley in the next 12-24 hours. Clark County Office of Emergency Management remains engaged on this issue with regional and state partners. The public is encouraged to not panic buy at the pump.”

FOX5 will have a full report on the gas line running from California to Nevada at 10 and 11 p.m.



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