How Do Differences in State Corporate Income Tax Systems Affect Compliance Cost Burdens?

31 Pages Posted: 26 Mar 2002

See all articles by Sanjay Gupta

Sanjay Gupta

Michigan State University - Eli Broad College of Business

Lillian F. Mills

University of Texas at Austin - McCombs School of Business

Date Written: March 15, 2002

Abstract

Prior multistate tax research on differences in state tax rules, while investigating the effects on revenue, investment, and tax burden, is silent regarding the effect on compliance costs. We investigate factors that explain state income tax compliance costs for large firms. We find that state compliance costs are about twice the relative federal burden. Such costs increase in the number of filing states, controlling for the number of returns filed, firm size, federal compliance costs and variables proxying for state tax complexity. Our evidence that multistate disconformity increases compliance cost burdens informs the debate about the costs of tax competition.

Keywords: multistate taxation, compliance costs, disconformity, burden

JEL Classification: H20, H70

Suggested Citation

Gupta, Sanjay and Mills, Lillian F., How Do Differences in State Corporate Income Tax Systems Affect Compliance Cost Burdens? (March 15, 2002). Available at SSRN: https://ssrn.com/abstract=304382 or http://dx.doi.org/10.2139/ssrn.304382

Sanjay Gupta

Michigan State University - Eli Broad College of Business ( email )

632 Bogue Street, 520 BCC
East Lansing, MI 48824
United States
517-432-6488 (Phone)

HOME PAGE: http://www.broad.msu.edu/

Lillian F. Mills (Contact Author)

University of Texas at Austin - McCombs School of Business ( email )

Austin, TX 78712
United States

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