Why is Delaware a tax haven?

Delaware is known as a “tax haven” to incorporate companies because of its light taxation. There is no sales tax in Delaware, it doesn't matter if a company's physical location is in the state or not; no in-state purchases are subject to tax in Delaware. Additionally, there is no state corporate income tax on goods and services provided by Delaware corporations operating outside of Delaware.

The state does not have a corporate tax on interest or other investment income that a Delaware holding company earns. If a holding corporation owns fixed-income investments or equity investments, it isn't taxed on its gains on the state level.

Delaware also does not collect personal property tax. There is a county-level real estate property tax, but it is very low compared to other states in the USA. Corporations can own their own office spaces and reduce the amount of property tax compared to other states.

The state has no value-added taxes (VATs). There is no inheritance tax in Delaware, and there are no capital shares or stock transfer taxes either.