alt Hacker NewsHuh? There is nothing illegal about setting up a corporation in Delaware or South Dakota.
If you have a Delaware corporation doing business in, say, California, and you refuse to register as a foreign corporation in California and follow the laws applicable to businesses in California, that is a different matter.
The Delaware corporation is perfectly legal; the failing to follow California's laws when your company is doing business there isn't.
Over half the Fortune 500 is incorporated in Delaware. Countless private companies are incorporated in Delaware and other states, with their owners properly registering as foreign corporations and paying applicable taxes and fees in second states where they do business.
The person in question wasn't arrested for buying and registering a car in Montana. He was arrested for not paying the tax he owed on it under Tennessee law after he brought it into Tennessee. The law there states that sales or use tax is owed on a vehicle if the vehicle is primarily housed and operated in the state.
Under Tennessee law, you are also required to change an out-of-state vehicle's registration to Tennessee if it's brought into the state and operated there for more than 30 days.
So, in summary, you can buy a car in Montana and pay no sales tax and it's not a crime. It becomes a crime when you use the Montana purchase to evade paying taxes in another state where you actually use and house the car.
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THe problem is what "doing business" means (and what it should mean) for internet companies.
If you're an American company selling your stuff to German users, are you doing business in Germany? What if you don't have a German translation of your site, don't accept Germany-specific payment methods and don't advertise in Germany-specific channels, but still ship there? What if your products are delivered electronically, and you don't apply any IP blocks? What if you IP block Germany, but don't block VPN use? What if you do block VPN use, but still process personal data of German citizens (even without giving them access to your systems)? What if you do everything in your power to stop German users from using your site, but the site is free and VPN detection isn't 100% reliable, so some users do slip through?
Just to be clear, there are no good answers here, and the law (and international law in particular) is wholly unprepared for the realities of the internet.
> Over half the Fortune 500 is incorporated in Delaware
If that's not the reddest of red flags, I don't know what is.
It is, however, off-topic for this thread.
Idk, where I live companies need to be tied to real people, so Delaware LLCs sound as shady as it gets to me.
But I was also never a fan of using one problem to justify not going after another. We ought to be able to walk and chew gum at the same time.
Someone who does not pay their taxes, be it a legal or illegal loophole, does not pay their fair share within the society they live in. It is not us people against the state, it is us people who are the state.
Just in case you’re not aware, people have problems with Delaware LLCs because:
A) They can be used relatively easily (compared to other states) as shell companies because you do not have to identify yourself publicly when minting the company. B) The legal process corporations can choose to go through in Delaware are extremely advantageous to corporations (look up The Court of Chancery)