Calling for an end to the so-called “Delaware Tax Loophole,” a group of Pittsburgh-area residents plans to protest at 4 p.m. today in front of the Toys "R" Us store on Route 19 in Cranberry.
The loophole refers to a tax law that allows corporations to shift profits to holding companies based in Delaware, where the tax structure is more favorable to businesses than that of Pennsylvania's.
According to the demonstrators who plan to be in front of the store today, Toys "R" Us is taking advantage of the loophole by setting up subsidiaries in Delaware, which doesn’t tax corporate profits earned from "royalties.”
“Our schools are dealing with millions of dollars in budget cuts, our roads and bridges are crumbling, our public services are being stretched past their limits, and we are letting literally thousands of companies do business in our state every year without asking them to pay a dime in income tax," said Denise Cox, of Industry.
"We need them to pay their share like everyone else,” Cox said.
Not true said Toys "R" Us spokeswoman Kathleen Waugh, who called the company's involvement in the referenced "loophole" ancient history.
"In the 1980s, the company had a corporate structure that took advantage of this tax benefit for its intellectual property rights," she said. "As a result of court rulings and law changes in many states, the company changed its corporate structure.
"In fact, the company pays a significant amount of corporate income taxes and real estate property taxes in the state of Pennsylvania."
The protest will include local teachers, students, health care workers and veterans. There also will be a bake sale to raise money for local parent-teacher groups, the organizers said.
Check back with Cranberry Patch later today for coverage of the protest.