Costco's CEO explains how they make record profits:

[El_Johns]

35. Walmart is its own "developer" & pays rent to itself for tax breaks.

As the world's biggest retailer, Wal-Mart Stores Inc. wmt -0.72% pays billions of dollars a year in rent for its stores. Luckily for Wal-Mart, in about 25 states it has been paying most of that rent to itself -- and then deducting that amount from its state taxes.

The strategy is complex, but the bottom line is simple: It has saved Wal-Mart from paying several hundred million dollars in taxes, according to court records and a person familiar with the matter. And Wal-Mart is far from alone.

http://online.wsj.com/news/articles/SB117027500505994065


http://www.walmartrealty.com/


Wal-Mart is known worldwide as a major retailer, offering an endless supply of merchandise to the more than 138 million customers that visit its stores each week. However, Wal-Mart’s business involves more than just kitchen appliances, apparel, and electronics - it also involves real estate. A division of Wal-Mart Stores Inc., its real estate arm - Wal-Mart Realty, based in Bentonville, AR - concentrates on the disposition (through sale, lease, and/or sublease) and management of soon-to-be vacated or vacant Wal-Mart and SAM’S CLUB facilities. In simple terms, Wal-Mart Realty deals with excess space, finding new uses for former Wal-Mart stores.

By vertically integrating this major portion of its real estate operations, Wal-Mart Realty’s unique take on surplus allows the organization to control its environment, costs, and power in the marketplace - and to squeeze added revenue from its real estate deals.

http://www.buildings.com/article-details/articleid/2980/title/real-estate-according-to-wal-mart.aspx