We are a pretty normal delaware c corp . If optimizing for not paying taxes, we'd probably focus on states like Texas, and divest from anyone and anything in California, but we haven't.
Bigger than our taxbill is our accountant, lawyer, etc bills, and in turn, their jobs get easier with delaware: they know it & it doesn't change as much as say California. More than taxes is day to day like big multiparty contracts , equity management, and more existentially, potential m&a. delaware law isn't federal law, but everyone knows it and follows it, so close enough.
it might feel expensive to start and maintain, but probably isn't when you look back at your actual costs. in addition, legal counsel will pressure you to reincorporate if you don't, which would be a double cost. would be my default choice if doing it again: only want to innovate in so many things, and unlikely for this to be one of the most important areas of the business to be extra clever on.
Also, since the Wayfair decision, pretty much any interstate income is taxable where the customer is located if you do enough business in that state (usually an income threshold, but in many states its a number-of-transactions threshold).
Locating in Delaware literally saves you nothing in paying taxes; indeed, it actually costs a tiny bit more, tax-wise, than locating in your primary state of business.
But on the note of other compliance expenses: being incorporated in Delaware increases your compliance costs. You're now subject to suit in Delaware and whatever states you actually do business in (including especially whatever state your HQ is located in). So, for example, you don't avoid exposure to CA law if you have CA customers (and many state consumer protection rights can't be waived by a ToS or by a signed contract). And you don't need to be incorporated in Delaware to include a jurisdiction clause in your B2B contracts.
Delaware is useful in the limited situation that you are a corporation with a complicated capital structure that needs a management-friendly, shareholder-averse court system.
Bigger than our taxbill is our accountant, lawyer, etc bills, and in turn, their jobs get easier with delaware: they know it & it doesn't change as much as say California. More than taxes is day to day like big multiparty contracts , equity management, and more existentially, potential m&a. delaware law isn't federal law, but everyone knows it and follows it, so close enough.
it might feel expensive to start and maintain, but probably isn't when you look back at your actual costs. in addition, legal counsel will pressure you to reincorporate if you don't, which would be a double cost. would be my default choice if doing it again: only want to innovate in so many things, and unlikely for this to be one of the most important areas of the business to be extra clever on.