Let’s say you run a tennis ball company in California that rakes in $100m/year in net income.
By incorporating in Delaware, though, you can likely save millions in taxes with something called the “Delaware loophole.”
In Delaware, intangible assets — think trademarks, copyrights, and leases — are free from taxation. Companies will often transfer these assets to a Delaware subsidiary and pay their own subsidiary for the rights to use said assets.
Author(s): Zachary Crockett
Publication Date: 10 April 2021
Publication Site: The Hustle