[Quarles & Brady LLP Letterhead]

                                  June 30, 2000





Mountain States Capital, Inc.
1407 East Thomas Road
Phoenix, Arizona  85014

     RE:  FEDERAL INCOME TAX ISSUES CONCERNING RECISSION OFFER TO PURCHASE
          OUTSTANDING NOTES AND OFFERING OF NEW NOTES

Ladies and Gentlemen:

     You have requested our opinion with respect to certain federal income tax
issues in connection with: (i) the offer, in the aggregate amount of $2,600,000,
representing principal and interest, to holders of promissory notes (the
"Outstanding Notes") of the opportunity to rescind or void their purchase of the
Outstanding Notes, and (ii) the offer, in the aggregate principal amount of
$10,000,000, to sell new promissory notes (the "New Notes"). All capitalized
terms used but not otherwise defined in this letter will have the same meaning
as in the Prospectus included in the Company's Registration Statement on Form
SB-2 (the "Prospectus").

     For purposes of rendering our opinions, we have examined and relied upon
(i) the Prospectus, (ii) the Internal Revenue Code of 1986, as amended through
the date hereof (the "Code"), the Treasury Regulations issued thereunder,
Revenue Rulings and Revenue Procedures issued by the Internal Revenue Service
(the "Service") and applicable case law, and (iii) such other documents as we
have considered necessary in order for us to render the opinions contained
herein. For purposes of this examination, we have assumed the authenticity of
original documents, the conformity to original documents of all documents
submitted to us as copies, the genuineness of all signatures, and the capacity
of each party executing a document to so execute such document.

     In rendering out opinions, we have also made the following assumptions with
respect to the Outstanding Notes and the New Notes: (i) the Outstanding Notes
were issued for and the New Notes will be issued for an amount equal to their
stated redemption price at maturity, (ii) the Outstanding Notes and the New
Notes both call for the payment of interest at a fixed rate, and at fixed
periodic intervals of one year or less, and (iii) the Outstanding Notes and New
Notes have fixed maturity dates of one year or less.

Mountain States Capital, Inc.
June 30, 2000
Page 2


     Based on our interpretation of the currently applicable sections of the
Code, the Treasury Regulations issued thereunder, Revenue Rulings and Revenue
Procedures issued by the Service and applicable case law, and the assumptions
described above, and subject to the qualifications and discussion in the
"Federal Income Tax Consequences" section of the Prospectus, it is our opinion
that:

     (A) The interest to be paid to a holder of Outstanding Notes or New Notes
will be taxable to the holder as interest income at the time the interest
accrues or is received by the holder in accordance with the holder's method of
accounting for federal income tax purposes.

     (B) Neither the Outstanding Notes nor the New Notes should have original
issue discount or market discount, and neither the Outstanding Notes nor the New
Notes should have bond premium in the hands of the initial holders. We express
no opinion as to whether the Outstanding Notes or the New Notes will have bond
premium in the hands of subsequent purchasers.

     (C) If the holder of an Outstanding Note accepts the recission offer,
receipt of a cash payment in consideration for the Outstanding Note, whether or
not applied to the purchase of a New Note, will be treated as a sale or exchange
and therefore, will be a taxable event.

     (D) The holder of an Outstanding Note or a New Note will recognize taxable
gain or loss equal to the difference between the amount realized (any amounts
attributable to unpaid accrued interest which will be includible in income as
interest in accordance with the holder's method of accounting) on the sale,
exchange or redemption of the note and such holder's adjusted tax basis in the
note subject to the sale, exchange or redemption.

     (E) A holder's adjusted tax basis in an Outstanding Note or New Note will
generally equal the cost of such note to the holder, reduced by any principal
payments received by the holder and any amortizable bond premium.

     (F) Assuming that the Outstanding Notes or the New Notes are held as
capital assets within the meaning of Section 1221 of the Code, gain or loss on
the sale, exchange or redemption of an Outstanding Note or a New Note will be
capital gain or loss.

     (G) In our opinion, the statements made in the Prospectus under "Federal
Income Tax Consequences" are correct as to matters of law as of the date of this
letter.

Mountain States Capital, Inc.
June 30, 2000
Page 3


     Our opinions are based on our current understanding of the applicable
federal law. There can, of course, be no assurance that a court or the Service,
when faced with the same facts, will reach the same conclusions as we have or
that the law will not be changed after the date of this letter. The information
and opinions given in tletter are effective as of the date of this letter.

     This opinion is rendered as of the date hereof and we disclaim any
obligations to advise you of any events hereafter arising which may adversely
affect such opinion.

     Except as specifically provided herein, we do not express any opinion in
this letter with respect to any issues pertaining to state, local or foreign tax
law that might affect the taxation of Mountain States or the holders of the
Outstanding Notes or the New Notes.

                                        Very truly yours,

                                        /s/ Quarles & Brady LLP

                                        QUARLES & BRADY LLP