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Comment by sabat | Hacker News Reader

Lawyer types: if one were to, say, incorporate in Delaware, and then rejoin the Amazon program from a Delaware address (presuming that's possible) -- would that be legal?

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I am not a lawyer, and this is not legal advice.

As long as Amazon didn't know you were a California resident, you'd probably get away with it. However you'd be opening Amazon up to the possibility of a lawsuit from California. If they figure that out, they will not be happy with you.

Wouldn't creating a Delaware corp for all of this be massive overkill? Anything purchased through the corporation for an employee's (your) use would then be taxed, too, right? This sounds like a pretty significant hassle, and really only a good idea for someone who makes a lot of money from their Affiliate stuff.

There are plenty of people who make lots of money from Amazon

Something's better than nothing right? As it stands your earnings from Amazon would go to zero.

I think as long as your business has a presence in CA (like your office or home office) you still have to pay taxes. Of course, you could register your business in a state that doesn't disclose stakeholder info, like Nevada or those Wyoming shell companies.

Edit: definitely not a lawyer

I don't mind paying taxes on my earnings from the affiliate program. It's not like the government would expect me to pay taxes on the cost of the goods sold. It's the amount made from the affiliate program.

Amazon is a significant source of income for me in California, and I was thinking of creating a California LLC this year anyway to shield from lawsuits. I'm now going to seriously think about doing it in Delaware instead.

Any advice?

Well the only one thing I do know that's a huge pain about having a California LLC is the $800 minimum tax. It sounds like you might be making enough that you owe more than that though.

If you need specific advice about tax liability or incorporation decisions, you may want to talk to an attorney.

Incorporating in Delaware does not necessarily make a corporation a Delaware resident only. If a corporation operates in California, it is probably subject to California taxes. In general, a corporation can be a resident of both the state of incorporation and the state of its principal place of business.

For sales/use tax, owning property in California or having regular employees in California may be enough.

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