Obvious_Chapter2082 t1_jbhazs9 wrote

Most companies incorporate in Delaware for the ease of it and the legal protection, since they have a chancery court for corps

It can help tax-wise, but only with state taxes. And enough states have combined reporting laws at this point that the benefit is pretty thin anyways

In either case, Nvidia’s state taxes here are a very negligible portion of their tax expense


Obvious_Chapter2082 t1_jbg3p5s wrote

This is the danger of looking at highly technical tax information and assuming it’s a simple read. If you dig into the 10-K for this company, they actually paid about 50% of their profit in tax this year. The discrepancy comes from a new R&D capitalization policy, which gives them a deferred tax benefit on their foreign derived intangible income. This benefit is only a small portion of the actual higher tax they’ll pay from this policy, but the US portion doesn’t impact effective tax rates

It’s wrong to say that corporations barely pay any tax, because income tax expense is a misleading metric that doesn’t relate to the tax a company pays


Obvious_Chapter2082 t1_jadakhn wrote

That’s just their income tax expense. The actual income tax they pay might be much larger or much smaller than this

Most large corps have low rates mainly from R&D credits and stock compensation. I’d assume Capital one doesn’t have much of those, or they could just have a large reconciling item that raises their rate