On: Why do so many companies incorporate in Delaware?

[gamblor956]

As discussed in other comments, the notional problem doesn't actually exist. The article was simply wrong on the Delaware Loophole in general; it still works in a handful of small states but it hasn't worked in any respectably sized state for longer than most people on HN have been alive.

Apple wouldn't get a California deduction for its "payment" of a "royalty" to Delawapple for an iPhone sold in California. It would get assessed a tax on the income it makes selling the iPhone to a buyer.

Note also: sales tax is a tax owed by the buyer of a good, not the seller. It is simply collected by the seller because it is more efficient for the seller to handle sales tax remittances than for each of their customers to do so. It's less overall work, it's easier to audit, and the seller can simply send the collected amounts in with their other periodic tax payments.

[thaumasiotes → gamblor956]

> Note also: sales tax is a tax owed by the buyer of a good, not the seller.

There is not even a theoretical difference between these two ideas.

[Retric → thaumasiotes]

Many states exclude 501 charities from paying sales tax which makes a tangible difference, and would be impossible if the seller paid the tax.