|
|
|
|
||||
|
||||
The Effect of Seller Income Taxes on Acquisition Price: Evidence from Purchases of Taxable and Tax-Exempt HospitalsDan S. DhaliwalUniversity of Arizona - Department of Accounting Merle EricksonUniversity of Chicago - Booth School of Business Shane HeitzmanSimon School of Business, University of Rochester Journal of the American Taxation Association (JATA), Vol. 26, No. 2 Abstract: This paper investigates the impact of the seller's tax liability on the price paid in hospital acquisitions. Lock-in theory predicts that for a given asset, asset holders with larger tax liabilities demand a higher price to compensate for income tax liabilities generated on the sale. We apply this theory to a sample of hospital acquisitions by for-profit firms where the primary difference among target hospitals is the seller's tax status - either taxable or tax-exempt. Consistent with the predicted lock-in effect, the evidence indicates that purchase prices are higher when the seller is taxable than when the seller is tax-exempt. Thus, our findings suggest that seller tax liabilities are positively related to purchase prices.
JEL Classification: H24, H25, G34, G32, M41, L31 Accepted Paper SeriesDate posted: March 29, 2004Suggested CitationContact Information
|
|
||||||||||||||||||||
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
FAQ
Terms of Use
Privacy Policy
Copyright
This page was processed by apollo1 in 1.297 seconds
