Delaware charges no income tax on corporations not operating within the state, so taking advantage of Delaware's other benefits does not result in an income tax cost. That said, Delaware has a particularly aggressive tax on banks that locate in the state.[citation needed] However, in general, the state is viewed as a positive location for corporate tax purposes because favorable laws of incorporation allow companies to minimize the corporate expenditures (achieved through legal standardization of corporate legal processes), creating a nucleus in Delaware with operating companies often in other states.
In addition, Delaware has used its position as the state of incorporation to generate revenue from its abandoned and unclaimed property laws. Under U.S. Supreme Court precedent, a state of incorporation gets to keep any abandoned and unclaimed property, such as uncashed checks and unredeemed gift certificates, if the corporation does not have information about the location of the owner of the property.Delaware is becoming increasingly aggressive in auditing and assessing companies for unclaimed property. For example, it has deputized sister states to act as contingency fee auditors for unclaimed property.
A state may levy, however, a franchise tax on the corporations incorporated in it. Franchise taxes in Delaware are actually far higher than in most other states which typically charge little or nothing beyond corporate income taxes on the portion of the corporation's business done in that state. Delaware's franchise taxes supply about one-fifth of its state revenue.
In February 2013 the London-based Economist published an article on tax-friendly jurisdictions, commenting that Delaware stood for “Dollars and Euros Laundered And Washed At Reasonable Expense”. Jeffrey Bullock, Delaware’s secretary of state, insists that it has struck the right balance between curbing criminality and “paying deference to the millions of legitimate businesspeople who benefit” from hassle-free incorporation.
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