Critics of Airbnb, Uber, and other companies in the so-called sharing economy argue that these companies are structured to avoid paying taxes. It appears that even companies on the fringes of the sharing economy are looking to dodge Uncle Sam.
James River Group, Uber’s insurer, paid a tax rate of just 12.6% last year. That’s less than half the average rate paid by companies in the S&P 500 last year, which was 27%. The effective U.S. corporate tax rate is 35%.
How did James River Group manage to avoid the tax man? A few years ago, it moved to an island. James River Group was formed in 2002 and was originally based in Chapel Hill, N.C. The company’s website still lists its mailing address as Raleigh, N.C. But in 2007, the company was acquired by New York-based hedge fund D. E. Shaw. The deal sparked two shareholder lawsuits and huge…
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