Most people think of downtown Houston, Texas as ground zero for the oil and gas industry. Houston, after all, serves as home base for corporate headquarters of oil and gas giants, including the likes of BP America, ConocoPhillips, and Shell Oil Company, to name a few.
Comparably speaking, few would think of Wilmington, Delaware in a similar vein. But perhaps they should, according to a recent New York Times investigative report by Leslie Wayne.
Wayne's story revealed that Delaware serves as what journalist Nicholas Shaxson calls a “Treasure Island” in his recent book by that namesake. It's an “onshore tax haven” and an even more robust one than the Caymen Islands, to boot.
The Delaware “Island” is heavily utilized by oil and gas majors, all of which are part of the “two-thirds of the Fortune 500” corporations parking their money in The First State.
“Delaware is an outlier in the way it does business,” David Brunori, a professor at George Washington Law School told The Times. “What it offers is an opportunity to game the system and do it legally.”
The numbers are astounding. “Over the last decade, the Delaware loophole has enabled corporations to reduce the taxes paid to other states by an estimated $9.5 billion,” Wayne wrote.
“More than 900,000 business entities choose Delaware as a location to incorporate,” explained another report. “The number…exceeds Delaware's human population of 850,000.”