loop·hole | \ˈlüp-ˌhōl \

Definition of loophole 

(Entry 1 of 2)

1a : a small opening through which small arms may be fired

b : a similar opening to admit light and air or to permit observation

2 : a means of escape especially : an ambiguity or omission in the text through which the intent of a statute, contract, or obligation may be evaded


loopholed; loopholing; loopholes

Definition of loophole (Entry 2 of 2)

transitive verb

: to make loopholes in

Examples of loophole in a Sentence


She took advantage of a loophole in the tax law. His attorney has been hunting for a loophole that would allow him to get out of the deal. tried to close a loophole in the new legislation
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Recent Examples on the Web: Noun

An exploitation some online oligopolies expose music authors to by using legal loopholes and operating a parasitic value creation model. Wolfgang Spahr, Billboard, "German Rights Body GEMA Applauds Europe-Wide Efforts to Curtail 'Parasitic' Value Models of Digital Services," 19 June 2018 City and state business and occupation taxes apply to gross income, and contain loopholes and deductions for many industries. Glennfleishman, Fortune, "Amazon Just Killed a Tax That Helps Homeless People," 12 June 2018 And don’t expect Texas legislators to close that loophole anytime soon. The Star-telegram Editorial Board, star-telegram, "Don't wait for lawmakers to stop school shootings. The solution begins with the rest of us," 25 May 2018 Of course, people (and companies) were able to find loopholes and continued to find ways of placing bets. Staff Report, courant.com, "All Of Your Sports Betting Questions Answered Following Supreme Court Decision," 15 May 2018 At the same time, Amazon has paid zero federal taxes through loopholes and legal creativity. Jessica Lee, The Seattle Times, "‘Amazon’s growth was a gift to the city’: Here’s what some readers say about Seattle’s proposed head tax," 7 May 2018 There are people whose job is to know every loophole and crevice of the marijuana laws. Kathleen Gray, Detroit Free Press, "Legalize marijuana? Advice for Michigan from Colorado," 12 July 2018 District Nine Supervisor Hillary Ronen plans to introduce legislation Tuesday aiming to shut that loophole. Trisha Thadani, SFChronicle.com, "Supervisor moves to strengthen renter protections in San Francisco," 10 July 2018 However, the new rules also raised concerns that the company’s previous policies contained loopholes allowing apps to collect and resell sensitive information such as photo locations, privacy advocates say. John D. Mckinnon, WSJ, "Lawmakers Press Alphabet and Apple on Smartphone Users’ Privacy," 9 July 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'loophole.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of loophole


1591, in the meaning defined at sense 1a


1664, in the meaning defined above

History and Etymology for loophole


loop entry 1

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Learn More about loophole

Dictionary Entries near loophole



loop hinge


loop in

looping snail

loop jump

Statistics for loophole

Last Updated

26 Sep 2018

Look-up Popularity

Time Traveler for loophole

The first known use of loophole was in 1591

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More Definitions for loophole



Financial Definition of loophole

What It Is

A loophole is an exception that allows a system to be circumvented or avoided.  It usually refers to legal, taxation, or security strategies that are exploited for personal gain.

How It Works

Loopholes are failures of a system to account for all conditions, variables, or exceptions.   To illustrate a legal loophole, consider a local development law that requires even an unoccupied building to pay real estate taxes so long as it receives a certificate of completion.  In order to avoid paying taxes, a builder may exploit this loophole and choose not to "complete" the building.

An example of a tax loophole is the tax break for small businesses who invest in "heavy vehicles". The tax break applies if the vehicle is used at least 50% of the time for the business.   Business owners may exploit this loophole by upgrading their own vehicles to SUVs, which are considered "heavy" under the tax law, and thereby gain a personal financial advantage.

In most instances, loopholes that lead to excessive abuse are corrected by subsequent regulations and laws.

Why It Matters

While loopholes may save money or allow a purchase that would otherwise not be economical, the use of loopholes is considered questionable. Exploiting loopholes may lead to intensive scrutiny and audits, or even just a feeling of bad faith.  For example, a tax payer should be aware when a tax consultant advises of specific tax advantage of whether the advantage is claimed on the basis of an allowable deduction or a loophole.

Source: Investing Answers



English Language Learners Definition of loophole

: an error in the way a law, rule, or contract is written that makes it possible for some people to legally avoid obeying it


loop·hole | \ˈlüp-ˌhōl \

Kids Definition of loophole

: a way of avoiding something a loophole in the law

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Comments on loophole

What made you want to look up loophole? Please tell us where you read or heard it (including the quote, if possible).


to reject or criticize sharply

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