IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Exploring the Role Delaware Plays as a Tax Haven

Listed author(s):
  • Scott D. Dyreng


    (Duke University)

  • Bradley P. Lindsey


    (North Carolina State University)

  • Jacob R. Thornock


    (University of Washington)

Registered author(s):

    We examine whether Delaware serves as a domestic tax haven. We find that taxes play an important role in determining whether U.S. firms locate subsidiaries in Delaware and that these tax factors are economically important when compared to the legal and governance factors considered in prior research. In addition, we find that U.S. firms most likely to implement a Delaware–based state tax avoidance strategy have state effective tax rates that range between 0.7 and 1.1 percentage points lower than other firms on average. The tax savings represent a 15 – 24% decrease in the state tax burden, and translate to an increase in net income of between 1.04% and 1.47%. We also find that the tax benefits of using Delaware tax strategies are diminishing over time and we provide evidence this decline is partially attributable to efforts by states to limit the multi-state tax avoidance of U.S. firms.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: no

    Paper provided by Oxford University Centre for Business Taxation in its series Working Papers with number 1212.

    in new window

    Date of creation: 2012
    Handle: RePEc:btx:wpaper:1212
    Contact details of provider: Postal:
    Park End Street, Oxford OX1 1HP UK

    Phone: +44 (0)1865 288800
    Fax: +44 (0)1865 288805
    Web page:

    More information through EDIRC

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:btx:wpaper:1212. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dongxian Guo)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.