Smith & Company, a Maryland Corporation, is in the process of reviewing its options for locating a new manufacturing facility. The facility needs to be located in a state other than Maryland, because if the facility locates in Maryland it will cause the Company to trip a Maryland tax provision that will cause the Company to pay much more in taxes.

The company has asked us to provide a checklist of issues it should consider when evaluating where the facility should be located. Smith manufactures athletic gear and 25 per cent of its gross revenues come from international sales (mostly in Europe). All of the Companys facilities currently are located in Maryland. The Company makes 90% of its sales through the Internet and 10% of its sales in Maryland at its sole retail outlet. The vast majority of its Internet customers are located in the mid-Atlantic.

Your checklist need only list tax (and any associated business) issues the company should consider in terms of its locating the manufacturing facility outside of Maryland.

C CORPORATION