AP: States Target 'Geoffrey' Trademark Royalty Deduction

According to a June 4, 2004 article from the Associated Press,

"The 'Geoffrey Loophole,' named after the familiar giraffe mascot of Toys "R" Us, is no fun for state taxing authorities.

Under the loophole, local outlets of large national chain stores pay royalties to sister companies in other states, claiming the payments as business expenses that are deducted from state income taxes. . . ."