University Outsources Services to Private Company Registered in Delaware

The University of Alabama decided last week to outsource its facilities management to a private firm, Hoar Construction. While based in Birmingham, the company is registered in the state of Delaware — where it does no business.

Delaware has long been known as a tax haven for both American and foreign-owned businesses. The reasons are obvious:

There is no sales tax in Delaware. There is no state corporate income tax in Delaware on goods or services provided by Delaware companies operating outside of Delaware. Delaware has no personal property tax. There are no State real property taxes. Delaware has no Ad-valorem or value-added taxes (VATs). Delaware has no taxes on business transactions Delaware has no use tax, inventory or unitary tax. There is no State of Delaware inheritance tax on stocks of Delaware Corporations operating outside of Delaware held by non-residents of Delaware. There are no Delaware capital shares or stock transfers taxes. Wilmington, Delaware has no city sales tax.

If Hoar pays no income taxes in Alabama, we wonder what Alabama citizens will think about the University paying a company with tax money — a company that itself pays no state taxes.

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