State Tax Policy and Business Organizational Form

28 Pages Posted: 16 Aug 2015

See all articles by LeAnn Luna

LeAnn Luna

University of Tennessee, Knoxville - College of Business Administration - Center for Business and Economic Research

Matthew N. Murray

University of Tennessee, Knoxville - College of Business Administration - Department of Economics

Date Written: December 2010

Abstract

This study examines business organizational form decisions as a source of tax base mobility. We posit that organizational form responses to state tax policy allow for an indirect means of exploring mobility through business tax planning. Using state-level IRS data for the years 1997-2008, we examine the decision to file as a partnership or corporation and how those decisions are affected by a variety of state tax policies. The results suggest that state tax policy, especially corporate and personal income tax rates, affects business entity choice decisions and impacts business planning opportunities within and across states.

Keywords: state corporate income tax, business organizational form, tax base mobility

JEL Classification: H25, H73

Suggested Citation

Luna, LeAnn and Murray, Matthew N., State Tax Policy and Business Organizational Form (December 2010). National Tax Journal, Vol. 63, No. 1, 2010. Available at SSRN: https://ssrn.com/abstract=2644427

LeAnn Luna (Contact Author)

University of Tennessee, Knoxville - College of Business Administration - Center for Business and Economic Research ( email )

711 Stokely Management Center
Knoxville, TN 37996-4334
United States
865-974-6080 (Phone)
865-974-3100 (Fax)

Matthew N. Murray

University of Tennessee, Knoxville - College of Business Administration - Department of Economics ( email )

508 Stokely Management Center
Knoxville, TN 37996-0550
United States
865-974-5441 (Phone)

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