Posted on 05/29/2009 7:22:16 PM PDT by reaganaut1
The Obama administration has riled corporate America by cracking down on secretive offshore tax havens. But now a big onshore refuge — Delaware — is drawing scrutiny, too.
Squeezed by hard times, states are pushing to collect taxes that corporations are avoiding through Delaware shell companies. Maryland has reclaimed $267 million in such taxes, including interest and penalties, and has assessed an additional $143 million.
About 20 states have adopted laws that would effectively keep companies from using the decades-old tax loopholes in Delaware. At stake are tens of billions of dollars in annual tax receipts, funds that states say they need during this recession.
...
At the center of the dispute are legal entities known as Delaware holding companies, which have been around for decades but took off in the 1990s, when accountants began pushing them aggressively. Corporations are allowed to establish these shell companies in Delaware, as well as in Nevada and Wyoming.
Typically, they then transfer to these subsidiaries ownership of things like trademarks, patents and investments. Delaware does not tax holding companies set up to own and collect income from such lucrative intangible assets.
(Excerpt) Read more at nytimes.com ...
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
Ping!
They can be mad all they want, just don't move here and change the laws to make Delaware like the tax-hell states they left!
Income from corporations HQ’d in Delaware is fully one third of Delaware’s income.
And the ratio has stayed the same since 1916.
This is not a new thing.
And this will be the reason Mike Castle wins the Delaware Senate race in 2010.
There’s one thing you don’t mess with in Delaware, and that’s it’s cash cow.
I learned about the Delaware tax haven in a high school economics course, in Arizona, in 1963. Glad to see the land of my ancestry is still in the groove, 46 years later.
How can anyone miss the large MBNA credit card operation up east of Newark I believe. Haven’t been past in awhile, I think they are on Rte 4.
MBNA stood for Maryland Bank of North America, don’t know who owns them now.
Some crazy governor (Schaeffer?) tried to impose a tax on the large credit card operations of basically this one company back in the ‘80s. Only other one was Choice (Citicorp) and I think they had already closed, but they’re gone now.
MBNA said they wouldn’t pay it and voted with their legs. Depending on where some of the employees lived they could commute to DE easily until they wised up and bailed as well.
I’ve had an eye on property in Newark since Chrysler closed the plant, used to check it out for grins and giggles anyway coming south to avoid the $1 toll on I-95. Bad enough to have to pay it, even dumber to sit in an hour long backup it caused. I found some nice houses and roads, went past some nice supermarkets and shopping to pick up incidentals and the real estate ads and “Salty Dog”, great marine ads.
Mike Castle still is extremely popular here, in what has become mostly a Dem state.
But he is a moderate Republican at best, and his strong support of embryonic stem cell research ruins it for me.
He’s 69, so a six year term as a Senator would cap a long political career for him.
He’s on the House Finance Committee and has been against the bailouts.
Between the credot card cos., banks, and corporations HQ’d here—you are right—you don’t mess with the cash cow.
BTTT
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.