IDEAS home Printed from https://ideas.repec.org/a/ntj/journl/v57y2004i2p209-27.html
   My bibliography  Save this article

Audit Selection and Firm Compliance With a Broad-Based Sales Tax

Author

Listed:
  • Alm, James
  • Blackwell, Calvin
  • McKee, Michael

Abstract

This paper examines the process by which firms are selected for a sales tax audit and the determinants of subsequent firm compliance behavior, focusing upon the Gross Receipts Tax in New Mexico. A two–stage selection model is used to estimate the State’s audit selection rule and, conditional upon audit selection, the firm’s compliance choice. The first–stage estimation results indicate that auditors select returns based upon a systematic, even if informal, audit rule. The second–stage results show that firms that exhibit greater variation in deductions, provide services, miss filing deadlines, and have an out–of–state mailing address have a lower compliance rate.

Suggested Citation

  • Alm, James & Blackwell, Calvin & McKee, Michael, 2004. "Audit Selection and Firm Compliance With a Broad-Based Sales Tax," National Tax Journal, National Tax Association;National Tax Journal, vol. 57(2), pages 209-227, June.
    • Handle: RePEc:ntj:journl:v:57:y:2004:i:2:p:209-27
    DOI: 10.17310/ntj.2004.2.04
    as

    Download full text from publisher

    File URL: https://doi.org/10.17310/ntj.2004.2.04
    Download Restriction: Access is restricted to subscribers and members of the National Tax Association.
    File URL: https://doi.org/10.17310/ntj.2004.2.04
    Download Restriction: Access is restricted to subscribers and members of the National Tax Association.
    File URL: https://libkey.io/10.17310/ntj.2004.2.04?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Praveen Sinha, 2010. "An econometric analysis of skewed productivity outcomes," Empirical Economics, Springer, vol. 38(2), pages 347-360, April.
    2. Iyere Oghuma, Richard, 2018. "Tax Audit, Penalty And Tax Compliance In Nigeria," International Journal of Contemporary Accounting Issues-IJCAI (formerly International Journal of Accounting & Finance IJAF), The Institute of Chartered Accountants of Nigeria (ICAN), vol. 7(2), pages 74-86, December.
    3. Roberto José Arias, 2004. "Reglas de selección para la fiscalización de Impuestos a las Ventas," Revista de Economía y Estadística, Universidad Nacional de Córdoba, Facultad de Ciencias Económicas, Instituto de Economía y Finanzas, vol. 42(2), pages 29-62, Diciembre.
    4. James Alm, 2019. "What Motivates Tax Compliance?," Journal of Economic Surveys, Wiley Blackwell, vol. 33(2), pages 353-388, April.
    5. Edoardo Di Porto, 2011. "Undeclared Work, Employer Tax Compliance, and Audits," Public Finance Review, , vol. 39(1), pages 75-102, January.
    6. James Alm & Keith Finlay, 2013. "Who Benefits from Tax Evasion?," Economic Analysis and Policy, Elsevier, vol. 43(2), pages 139-154, September.
    7. Andrew Yim, 2009. "Efficient Committed Budget for Implementing Target Audit Probability for Many Inspectees," Management Science, INFORMS, vol. 55(12), pages 2000-2018, December.
    8. Alm, James & Martinez-Vazquez, Jorge & McClellan, Chandler, 2016. "Corruption and firm tax evasion," Journal of Economic Behavior & Organization, Elsevier, vol. 124(C), pages 146-163.
    9. Johnson, Cathleen & Masclet, David & Montmarquette, Claude, 2010. "The Effect of Perfect Monitoring of Matched Income on Sales Tax Compliance: An Experimental Investigation," National Tax Journal, National Tax Association;National Tax Journal, vol. 63(1), pages 121-148, March.
    10. Birskyte Liucija, 2014. "The Impact of Trust in Government on Tax Paying Behavior of Nonfarm Sole Proprietors," Scientific Annals of Economics and Business, Sciendo, vol. 61(1), pages 1-15, July.
    11. James Alm & Yongzheng Liu & Kewei Zhang, 2019. "Financial constraints and firm tax evasion," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 26(1), pages 71-102, February.
    12. Edoardo Di Porto, 2009. "Audit, tax compliance and undeclared work: an empirical analysis," LABORatorio R. Revelli Working Papers Series 94, LABORatorio R. Revelli, Centre for Employment Studies.
    13. Adamu Jibir & Musa Abdu & Tasiu Muhammad, 2020. "Analysis of Tax Compliance in Sub-Saharan Africa: Evidence from Firm-Level Study," Econometric Research in Finance, SGH Warsaw School of Economics, Collegium of Economic Analysis, vol. 5(2), pages 119-142, December.
    14. Leonardo Barros Torres & Jaylson Jair da Silveira, Gilberto Tadeu Lima, 2022. "To Comply or not to Comply: Persistent Heterogeneity in Tax Compliance and Macroeconomic Dynamics," Working Papers, Department of Economics 2022_04, University of São Paulo (FEA-USP).
    15. Fabio Méndez, 2014. "Can corruption foster regulatory compliance?," Public Choice, Springer, vol. 158(1), pages 189-207, January.
    16. Le, Duong Trung & Malesky, Edmund & Pham, Anh, 2020. "The impact of local corruption on business tax registration and compliance: Evidence from Vietnam," Journal of Economic Behavior & Organization, Elsevier, vol. 177(C), pages 762-786.
    17. James, Simon & Edwards, Alison, 2010. "An annotated bibliography of tax compliance and tax compliance costs," MPRA Paper 26106, University Library of Munich, Germany.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ntj:journl:v:57:y:2004:i:2:p:209-27. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: The University of Chicago Press (email available below). General contact details of provider: https://www.ntanet.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.