Wal-Mart is doing this by setting up one subsidiary to run all its stores and sets another subsidiary up to own its real estate. The operating subsidiary then pays the rental cost to the real estate subsidiary and takes a tax deduction for the rent. This money will, however, end up in the corporation's own pocket. The Wal-Mart corporation claims that they are doing nothing wrong, rather they are taking advantage of an overlap of state and federal tax laws in an effort to reduce it's taxes and cost.
Wal-Mart is doing this by setting up one subsidiary to run all its stores and setting up another subsidiary to own its real estate. The operating subsidiary then pays the rental cost to the real estate subsidiary and takes a tax deduction for the rent. This money will, however, end up in the corporation's own pocket. The Wal-Mart corporation claims that they are doing nothing wrong, rather they are taking advantage of an overlap of state and federal tax laws in an effort to reduce its taxes and cost.
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sets another subsidiary up
setting up another subsidiary
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