State Supreme Court Upholds Tax Loophole

The State Supreme Court has upheld a tax loophole, but just barely. The Court says it is legal in Missouri for companies to set up dummy holding companies in Delaware and divert profits to them to escape paying taxes on those profits in Missouri. It’s a 4-3 ruling by the Court, which says companies can pay licensing fees that equal their profits to dummy corporations in Delaware, where no taxes are charged on that income. It’s one of the loopholes that Governor Holden says needs to be closed in Missouri tax law.