State Corporation Income Taxation: An Economic Perspective On Nexus
AbstractActing in the interest of their residents, U.S. states have incentives to impose taxes on the profits of corporations owned by nonresidents, within limits imposed by federal statutes and by the Constitution. This paper presents a model within which a state — using an apportionment formula that includes a sales factor — would choose to tax the income of out-of-state corporations that derive revenues from the sale or licensing of intangible assets to in-state customers, provided that such corporations have sufficient nexus to be taxable. Although such policies enable states to capture rents from nonresidents, they also introduce tax distortions by imposing implicit tariffs on sales by out-of-state firms.
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Bibliographic InfoArticle provided by National Tax Association in its journal National Tax Journal.
Volume (Year): 63 (2010)
Issue (Month): 4 (December)
Other versions of this item:
- David Wildasin, 2009. "State Corporation Income Taxation; An Economic Perspective on Nexus," Working Papers 2009-08, University of Kentucky, Institute for Federalism and Intergovernmental Relations.
- David E. Wildasin, 2010. "State Corporation Income Taxation - An Economic Perspective on Nexus," CESifo Working Paper Series 3218, CESifo Group Munich.
- David E.Wildasin, 2010. "State Corporation Income Taxation: An Economic Perspective on Nexus," Working Papers 1011, Oxford University Centre for Business Taxation.
- H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
- H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
- K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law
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