Schwab net quarterly profit this last quarter was $951M. That move would save them ~$100M in profit a quarter from California state corporate tax.
Not really. State taxes are done on an appointment and allocation basis. CA uses 3 factor apportionment for financial firms, so while selling property in CA reduces some of one of the factors the rental replacement could negate that, their instate payroll they said is remaining relatively the same, and in state sales won't change. So all in it most probably won't appreciably change their CA taxes. If they were not a financial services firm and therefore just using single factor apportionment on sales they could move every employee out of the state and sell all their property there and it would have zero impact on their state taxes. State corporate taxes are complicated, we haven't even started talking allocations or throwback and throwout rules! BTW the bank/financial tax rate in CA is actually 10.84%, the author cited the general business type tax.
Bernie supporters/Dems= bad pattern.......................................................................
You are saying even if they are California based, California won't tax them on their worldwide profits, only profits generated from California?
Yep, that's how single factor sales apportionment works. Triple factor also takes into account payroll and real or rental property. Throwback and throwout impact that somewhat if sales are in jurisdictions with no tax.
Thank you for the clarification. In that case why move? Why are hedge fund companies moving out of NYC to Florida?
Hedge funds are a bit of a special case because they're earning most of their income as carry and they don't have much if any "revenue" which is apportioned (capital gains are actually allocated, a similar but different process). Plus most are organized as partnerships so the tax load is at the individual tax level for them where there generally aren't apportionment rules (with a couple exceptions like IL).