Earlier this week, I wrote about about Madison-area real estate developer (and possible U.S. Senate candidate) Terrence Wall’s tax dodge to avoid paying Wisconsin corporate taxes. At the time, I noted Wall had set up his company’s principle office in Wilmington, Delaware, ostensibly because Delaware has no state corporate taxes, allowing T. Wall Properties to benefit from the so-called “Las Vegas loophole,” thus avoiding paying its fair share of taxes here in Wisconsin.

As if Terrence Wall’s tax dodge for T. Wall Properties wasn’t bad enough, I’ve done a little digging on the Delaware State Department’s Division of Corporations website, where I was able to determine Terrence Wall has not one, but SIXTEEN corporations set up in Delaware to presumably avoid taxes here in Wisconsin:

T. WALL PROPERTIES ARIZONA L.L.C.
T. WALL PROPERTIES CORE FUND L.L.C.
T. WALL PROPERTIES L.L.C.
T. WALL PROPERTIES MASTER CORP.
T. WALL PROPERTIES VALUE FUND L.L.C.
T. WALL REALTY FUND I LLC
T. WALL REALTY MANAGEMENT LLC
TW Property Holding LLC
TW Property LLC
TW Properties LLC
HC Office Center Corp.
High Crossing Development Corp.
WS Office Center Corp.
Greenway Master L.L.C.
525 Junction Road L.L.C.
Greenway Office Center L.L.C.

So here’s what I’m thinking….since Terrence Wall thinks Delaware is such a great place to do business, seeing as how he’s set up sixteen companies there, then perhaps he should consider running for Delaware’s U.S. Senate seat in 2010, since I hear it’s going to be open. So here’s a word of advice for Mr. Wall: Terrence, if you’re interested in running for the U.S. Senate in Delaware, just go ahead and visit the State of Delaware Commissioner of Elections website and fill out the necessary paperwork; you’d probably have a better chance of winning that seat than you do of winning Wisconsin’s Senate seat.

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28 Responses to Maybe he should run for the U.S. Senate in Delaware

  1. Jim says:

    Think Feingold will use this against him or is this too low for our favorite Senator?

  2. silent E says:

    Well he can’t run in Delaware because he lives here…. THAT would be illegal.
    Has Wall done anything illegal?
    Maybe the guy doesn’t want to get hammered by the high taxes in Wisconsin.
    Are you honestly telling me that democrats don’t utilize loopholes that will help them gain financially?
    Just askin’

    • Zach W says:

      E, remember when Alan Keyes ran for the U.S. Senate in Illinois against Barack Obama, even though Keyes didn’t live in Illinois? As Jim noted, the only requirement is that the candidate actually be residing in the state once he or she is sworn into office.

  3. Jim says:

    He could run for Senate in Delaware because:

    “No person shall be a Senator who shall not have attained to the Age of thirty Years, and been nine Years a Citizen of the United States, and who shall not, when elected, be an Inhabitant of that State for which he shall be chosen.”

    All he’d have to do would be move there in the next year.

    But the main point is this guy wants to be the Senator of a state he had been legally cheating out of taxes? What is he going to tell the small business owners that could not afford to set up corporations in name only, that actually DID pay their taxes in Wisconsin?
    This revelation makes the guy look like a dick.

    Ed. Note: I fixed the HTML.

  4. silent E says:

    Well now that it’s been brought up, those business owners could do the same and save a bunch of money. Maybe the dems in state government should do something to close those loopholes or maybe they just don’t want to…… Maybe they too should be investigated. The guy might be a dick but he’s a smart one………

  5. Jim says:

    That was my whole point, that those small business owners CAN’T set up an out of state corporation. Things like that cost money and a small business simply cannot afford it.
    And that loopwhole WAS closed this year, it was one of the first things Democrats did when they took over the Assembly.

  6. silent E says:

    Yep and once the loophole was closed… BAM… Higher taxes. Screwing the small businesses even more and BTW… You could do that in other states as well and it isn’t that pricey compared to the taxes.

    • Jim says:

      When the loophole was closed…BAM…business that operated in Wisconsin had to pay the taxes they owed, like everyone else. So if this real estate business is operating in WI but not paying taxes here, how much good are they doing for our state? I don’t know exactly how many of these type of businesses are registered in Delaware but I guarantee there are businesses based in WI that would love to step up and take over for the tax-evaders.

    • Zach W says:

      E, taxes didn’t go up when the “Las Vegas loophole” closed; those companies that were avoiding paying their fair share of corporate taxes simply had to start paying their fair share, putting them on a level playing field with every other Wisconsin business.

  7. Super Id says:

    Nonsense, its under two hunderd bucks to file.

    In any event, almost every commercial real estate project that I’ve ever seen has the ownership entity registered in Delaware. It’s done for a variety of reasons but primarily because Delaware is the hub of corporate law so there is predictibility of results. In my opinion, registering in Delaware is the standard practice for the indjustry so I wouldn’t read too much into it.

  8. silent E says:

    Tax evaders???? Do you think registering your business in Delaware exempts you from personal income tax??
    You guys are grasping at straws….Move along.

  9. Jim says:

    This has nothing to do with personal income taxes. This is about his businesses, registered out of state to avoid/circumvent/escape/evade paying taxes that other businesses here have to pay, essentially increasing the tax burden on honest businesses. And that is my problem with Mr. Wall.

  10. Super Id says:

    Jim, You’ve overlooked that almost every “business” on the list is an “LLC”. One of the key attributes of an LLC is that it provides for pass through taxation. In other words, LLC are not taxed at all. The income it produces is taxed on an individual level. If Wall has an ownership in any LLC, he needs to report as income in the state of his domicile, which is presumably Wisconsin. Thus, your assertion that this is a tax dodge is baseless.

  11. PartiallyBlue says:

    This whole thing is a matter of integrity. Unless Mr. Wall has other ways to demonstrate his integrity, the evidence against him has to be taken seriously.

    I don’t think that paying business taxes to the State of Wisconsin is the sole measure of integrity but without contravening evidence then he has some explaining to do.

    • Super Id says:

      PB,
      Respectfully, the whole premise of Zach’s post is false. T. Wall is not using a “loop hole” by registering in Delaware. Heck, even a wiki search would show that an LLC is not subject to corporate tax:

      “An LLC, although a business entity, is a type of unincorporated association and is not a corporation. The primary characteristic an LLC shares with a corporation is limited liability, and the primary characteristic it shares with a partnership is the availability of pass-through income taxation. It is often more flexible than a corporation and it is well-suited for companies with a single owner.”

      I know nothing of Wall, but I do know a few things about real estate law and industry practices. Just from the list of companies listed in the post I can make a few assumptions regarding Wall’s business. For example, it appears that he develops in other states besides Wisconsin. see T. WALL PROPERTIES ARIZONA L.L.C. Don’t you think it makes sense to have all of your business interests interpreted under the same set of laws? Delaware’s adoption of the internal affair doctrine enables members of an LLC to do so. In other words, say Wall and his partners get in a dispute over that Arizona development, under the internal affairs doctrine, an Arizona court would have to apply Delaware law to resolve the dispute.

      Attacking a real estate developer’s use of a Delaware registered LLC is like attacking a carpenter’s use of a hammer. It’s just silly attack that is uniformed and reeks of partisan rhetoric. But hey, if it’s all they got.

      Cheers,

      • PartiallyBlue says:

        I suppose if business is primary and loyalty to the state is secondary then you have a valid point.

        As I said, if there is NO other evidence of his support of Wisconsin (other than his residence) then one has to consider Zach’s point as having merit. However, if you have something that shows his support for the State of Wisconsin then Zach’s point is less important.

        I understand completely why businesses incorporate in Delaware. The laws favor businesses. But isn’t that what a moral position is about? It isn’t what advantages one gains by surrendering one’s integrity, or fealty, or loyalty, it is about what is the right thing to do. For a resident of Wisconsin to incorporate in Delaware because of tax advantages may be a practical and financially wise position to take; but does that reflect on the character of the person? I think so.

        It’s like driving a Honda when you work at Ford. Or betting on Minnesota against Green Bay when you are a Packer fan. Some things just reflect on one’s character. Picking and choosing because it’s a personal advantage tells you something about the man.

      • Jim says:

        Admittedly I am not an expert on LLCs. PB’s post rings true, if only because Wall must be registering his business in Delaware for some sort of financial gain. I’m not anti-business, its just the business owner I know the best, and whose business I know most and am well aware of, is registered in Wisconsin. I know he pays all the necessary taxes TO Wisconsin, the state we both live in. Locating your business elsewhere through technicalities seems like cheating to me, and I think thats wrong. This goes back to many posts ago on this thread, how could someone ask for my vote when I know he won’t even pay taxes in this state? I couldn’t do that, not possible.

  12. […] politically for the possible Republican contender. The left-of-center Wisconsin blog Blogging Blue uncovered that Wall had set up his company offices not in Wisconsin, but in Delaware, in order to avoid paying […]

  13. Johnny says:

    Most of these businesses are not corporations. They’re LLCs. As such, they wouldn’t be subject to to taxation in Wisconsin anyway. Wall may gain certain benefits from organizing these companies in Delaware, but tax avoidance is not one of them.

  14. […] a real estate developer.  Apparently, the left side of the blogosphere has developed the notion  (and here) that because Terrence Wall has created and registered LLCs in Delaware instead of […]

  15. Duke33 says:

    All tax requirements of an LLC pass directly on to the investors and they are taxed at their income level in the state they reside. As others have said, corporations register in Delaware because of favorable, consistent court rulings, the ease of incorporation and the low cost of incorporation. That is why almost 90% of all businesses file in Delaware.

    I am a Russ Feingold supporter and he will continue to receive my vote. Uninformed blog posts such as these do nothing to further important, substantial debate on the issues.

  16. Badger says:

    I agree– this is a truly uninformed post. It takes a lot of courage to write about LLC tax liabilities when one doesn’t know what an LLC actually is. It takes even more courage to suggest a viable Senate candidate not run because he executed a standard business procedure for perfectly understandable reasons (i.e. registrations costs,consistent court rulings).

    LLCs and Corporations are subject to different tax laws. Combined reporting, the loophole to which Zach was referring in a reply, is aimed at corporate income tax maneuvering.

    It’s shoddy journalism like this that gives blogs a bad name. Research!!!

  17. Cliff says:

    Journalist or not, if you don’t know what you are talking about, keep your mouth shut.

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