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May 19th, 2012, 09:44 AM #1How about Delaware
I live in NY and thought about forming a Delaware Corporation. and then just have the Delaware Corporation pay me a salary. Would this be a viable workaround
May 19th, 2012, 01:27 PM #2
- Join Date
- November 14th, 2005
- Chapel Hill, NC
Give your friendly accountant a call. He/she will spell it out quickly.You must climb this mountain. There is no elevator. ---- Don't stick your finger in the liquid nitrogen.
May 19th, 2012, 02:43 PM #3
When I set up a Delaware corporation I had a tax attorney and a CPA involved. And I actually moved to Delaware* from (tax-n-spend) Maryland. In important matters such as what you are asking don't look for free advice - because you might get what you pay for.
* I have a "witness" to me living in Delaware. Witzer has been to my home.
May 19th, 2012, 06:35 PM #4
My CPA told me that not be shielded from state taxes for the state I resided in if I create a Delaware corporation. So you might get away with it but if NY came after you the Deleware corp wouldn't protect you.
May 19th, 2012, 07:52 PM #5
Where a company is incorporated is irrelevant. Where it is engaged in business is what determines "residency", whether it's operating a B&M store, a distribution center, or a room full of computers where its website is built and maintained. It's the same principle whether it's a manufacturing company incorporated in Montana with a plant in Texas or an affiliate incorporated in Nevada but who operates his sites out of a basement in Redwood City, CA.
And you need to consider this. Say there are 10 merchants who each sell over $1 M per year to New York residents and who do not accept New York residents into their affiliate programs in order to avoid the requirement of collecting NY sales taxes on all $1 M per year of sales. Say you could fool these 10 merchants into thinking you reside in a state other than NY because you are incorporated in that other state (but you do physically live in NY and do your affiliate marketing work in NY). Say you promote enough sales through your sites to meet the threshold to require these merchants to collect NY state sales taxes. Say the state of NY finds all this out. Say the state of NY then sues these 10 merchants for the sales taxes they did not collect on all $ 1 M per year of sales, plus penalties and interest. Can you guess what these merchants will do to you for fraudulently inducing them to violate NY state law and in causing them to owe the state of NY millions of dollars?