Tax rate in DCF? Company that operates in multiple US states
For tax rate in DCF, what is right state tax rate to use for a company incorporated in Delaware that has its headquarters (and most employees) in Utah, and will be buying an asset in Texas that will contribute to most of the future cashflows?
I know the federal tax rate is 21%, but which state tax rate do I use in this scenario?
I am thinking it's possibly Delaware (state where company is incorporated)?
Wouldn’t taxable income be better?
What if this company has never had positive operating income?
Why would a company pick to incorporate in Delaware rather than South Dakota or Wyoming?
On the job people usually just use 21% federal tax rate or 25% as a catch all for state rates. If you have a live deal just use whatever the company says their tax rate is and call it a day. Negative earnings does not change the tax rate it just creates NOLs (I.e deferred tax assets) that can offset future taxes
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