Correct. Tax avoidance has evolved into a shell game of jurisdiction shopping and regulatory arbitrage. In the USA, states got so fed up with companies assign

Correct. Tax avoidance has evolved into a shell game of jurisdiction shopping and regulatory arbitrage. In the USA, states got so fed up with companies assigning their trademark and copyrights to DE subsidiaries they could make tax-free royalty payments to that they started doing combined reporting to nullify the effect of those constructions. Even though companies had no offices, employees, or business in DE, they nonetheless were claiming that their very valuable IP was situated there. The net effect is that it's easy to deduct royalty payments in a high tax state and have them appear in DE, a low-tax state. Not to be undone by combined reporting, they've (companies) now expanded this approach to offshore destinations to keep the benefits of transfer pricing. GOOG does it. AAPL does it. MSFT does it. http://www.nytimes.com/2012/04/29/business/apples-tax-strategy-aims-at-low-tax-states-and-nations.html?pagewanted=all&_r=0 http://www.nytimes.com/2012/04/29/business/apples-tax-strate...