State Corporation Income Taxation; An Economic Perspective on Nexus
AbstractActing in the interest of their residents, within limits imposed by Federal statute and by the Constitution, states have incentives to impose taxes on the profits of corporations owned by nonresidents. 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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Kentucky, Institute for Federalism and Intergovernmental Relations in its series Working Papers with number 2009-08.
Length: 21 pages
Date of creation: Mar 2009
Date of revision:
Other versions of this item:
- Wildasin, David E., 2010. "State Corporation Income Taxation: An Economic Perspective On Nexus," National Tax Journal, National Tax Association, vol. 63(4), pages 903-24, December.
- David E.Wildasin, 2010. "State Corporation Income Taxation: An Economic Perspective on Nexus," Working Papers 1011, Oxford University Centre for Business Taxation.
- David E. Wildasin, 2010. "State Corporation Income Taxation - An Economic Perspective on Nexus," CESifo Working Paper Series 3218, CESifo Group Munich.
- H7 - Public Economics - - State and Local Government; Intergovernmental Relations
- G01 - Financial Economics - - General - - - Financial Crises
This paper has been announced in the following NEP Reports:
- NEP-ACC-2009-04-05 (Accounting & Auditing)
- NEP-ALL-2009-04-05 (All new papers)
- NEP-PBE-2009-04-05 (Public Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Douglas Shackelford & Joel Slemrod, 1998. "The Revenue Consequences of Using Formula Apportionment to Calculate U.S. and Foreign-Source Income: A Firm-Level Analysis," International Tax and Public Finance, Springer, vol. 5(1), pages 41-59, February.
- Wilson, John Douglas, 1999. "Theories of Tax Competition," National Tax Journal, National Tax Association, vol. 52(n. 2), pages 269-304, June.
- Wildasin, David E. & Wilson, John Douglas, 1998. "Risky local tax bases: risk-pooling vs. rent-capture," Journal of Public Economics, Elsevier, vol. 69(2), pages 229-247, June.
- Wilson, John Douglas & Wildasin, David E., 2004. "Capital tax competition: bane or boon," Journal of Public Economics, Elsevier, vol. 88(6), pages 1065-1091, June.
- Rosanne Altshuler & Harry Grubert, 2009.
"Formula Apportionment: Is it better than the current system and are there better alternatives?,"
0901, Oxford University Centre for Business Taxation.
- Altshuler, Rosanne & Grubert, Harry, 2010. "Formula Apportionment: Is It Better Than The Current System And Are There Better Alternatives?," National Tax Journal, National Tax Association, vol. 63(4), pages 1145-1184, December.
- David E. Wildasin, 2005. "Fiscal Competition," Working Papers 2005-05, University of Kentucky, Institute for Federalism and Intergovernmental Relations.
- Bradford, David F., 1978. "Factor prices may be constant but factor returns are not," Economics Letters, Elsevier, vol. 1(3), pages 199-203.
- Weingast, Barry R. & Wittman, Donald, 2008. "The Oxford Handbook of Political Economy," OUP Catalogue, Oxford University Press, number 9780199548477.
- William H. Hoyt & J. William Harden, 2005. "MSA Location and the Impact of State Taxes on Employment and Population: A Comparison of Border and Interior MSA's," Working Papers 2005-01, University of Kentucky, Institute for Federalism and Intergovernmental Relations.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (David E. Wildasin).
If references are entirely missing, you can add them using this form.