State Legislatures Target Trademark Tax Loophole

Law360, New York (June 24, 2004, 12:00 AM EDT) -- State legislatures across the United States are making a concerted effort to close a tax loophole that allows corporations to claim as business expenses trademark royalty payments paid to sister companies established in other states.

However, those efforts have been only partially successful, as many legislatures remain entrenched in a debate over how to close the loophole.

Under the "Geoffrey Loophole," named after the giraffe mascot of Toys "R" Us, local outlets of large national chain stores pay royalties to sister companies in other states, claiming...
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