An economic model of interjurisdictional taxation is developed and used to analyze the effects of different attribution rules on the location of production, sales, and input use. To illustrate the usefulness of the model, two methods of attribution are studied: separate accounting and formulary apportionment. It is shown that if the tax systems across jurisdictions are identical and neutral, then the attribution method is arbitrary. It is also shown that separate accounting rules can be developed using standard economic definitions even in cases where this method is claimed to fail.
Anand, Bharat N., and Richard Sansing. 2000. The weighting game: Formula apportionment as an instrument of public policy. National Tax Journal53 (2): 183-199.
2.
Butt, Aisha. 2004. Formulary apportionment in the European Union. Master’s thesis, University of Lund, Sweden.
3.
Christensen, Steve. 1997. Formulary apportionment: More simple—on balance better? Law and Policy in International Business28 (4): 1133-1165.
4.
Conrad, Robert F.1985. Separate accounting versus formulary apportionment: What can positive economics say? Special tax issue, Energy Journal6:291-307.
5.
Corrigan, Eugene F.1980. Toward uniformity in interstate taxation. Special report, Tax Notes, September 15, pp. 507-514.
6.
Edmiston, Kelly D.2002. Strategic apportionment of the state corporate income tax: An applied general equilibrium analysis. National Tax Journal55 (2): 239-262.
7.
General Accounting Office (GAO).1983. Interstate taxation. Washington, DC: GAO.
8.
Gerard, Marcel, and Joann M. Weiner. 2003. Cross-border loss offset and formulary apportionment: How do they affect multijurisdictional firm investment spending and interjurisdictional tax competition? CESIfo (Center for Economic Studies, Information and Research) Working Paper 1004, Munich, Germany.
9.
Goolsbee, Austan, and Edward L. Maydew. 1998. Coveting thy neighbor’s manufacturing: The dilemma of state income apportionment. National Bureau of Economic Research Working Paper 6614, Cambridge, MA.
10.
Gordon, Roger H., and John D. Wilson. 1986. An examination of multijurisdictional corporate income taxes under formulary apportionment. Econometrica6:1357-1373.
11.
Harvard Law Review. 1980. The Supreme Court, 1979 Term. 94 (1).
12.
Hellerstein, Jerome R., Walter Hellerstein, and Joan Youngman.2005. State andlocal taxation3. 8th ed.Eagan, MN: West Law.
13.
Hellerstein, Walter. 1982. State income taxation of multijurisdictional corporations and the Supreme Court. National Tax Journal35 (4): 401-425.
14.
Hellerstein, Walter. 1984. Dividing the state corporate income tax base: Developments in the Supreme Court and Congress. In The state corporation income tax, ed. Charles E. McLure. Stanford, CA: Hoover Press.
15.
Hurter, Arthur P., Jr., Joseph S. Martinich, and Enrique R. Venta. 1980. A note on separability of production and location decisions. American Economic Review70:1042-1045.
16.
Martens-Weiner, Joann. 2006. Company tax reform in the European Union: Guidance from the United States and Canada on implementing formulary apportionment in the EU. New York: Springer.
17.
McIntyre, Michael J., Paul Mines, and Richard D. Pomp. 2001. Designing a combined reporting regime for a state corporate income tax: A case study of Louisiana. Louisiana Law Review61:699-761. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=314801.
18.
McLure, Charles E., Jr.1981. Toward uniformity in interstate taxation: A further analysis. Tax Notes13 (1): 51-63.
19.
McLure, Charles E., Jr.1983a.Defining a unitarybusiness: An economist’s view. National Bureau of Economic Research Working Paper 1125, Cambridge, MA.
20.
McLure, Charles E., Jr. 1983b. An economicdefinition of a unitarybusiness. Presented in the annualconference of the National Tax Association, Seattle, WA, October.
21.
McLure, Charles E., Jr.1984. Defining a unitary business: An economist’s perspective. In The state corporate income tax, ed. Charles E. McLure. Stanford, CA: Hoover Press.
22.
McLure, Charles E., Jr., and Walter Hellerstein. 2002. Does sales-only apportionment of corporate income violate the GATT? National Bureau of Economic Research Working Paper 9060, Cambridge, MA.
23.
Mieszkowski, Peter, and John Morgan. 1984. The effects of partial state corporate income taxes on multi-state corporations. In Interstate taxation, ed. Charles E. McLure. Stanford, CA: Hoover Press.
24.
Musgrave, Peggy B.1984. The state corporate income tax: Principles for the division of the tax base. In The state corporate income tax, ed. Charles E. McLure. Stanford, CA: Hoover Press.
25.
Nielsen, Søren Bo, Pascalis Raimondos-Moller, and Guttorm Schjelderup. 2001. Tax spillovers under separate accounting and formula apportionment. Centre for Economic Policy Research Discussion Paper 2831, London. http://www.cepr.org/pubs/dps/DP2831.asp.
26.
Sørenson, Peter Birch. 2003. Company tax reform in the European Union. Copenhagen, Denmark: Economic Policy Research Unit, University of Copenhagen.
27.
Spense, Michael. 1983. Review. Journal of Economic Literature21 (3): 981-990.
28.
Weiner, Joann M. 1999a. Formula apportionment and unitary taxation: What works and doesn’t work. In Proceedings: Ninety-first Annual Conference on Taxation, Austin, Texas, November 8-10, 1998 and Minutes of the annual meeting of the National Tax Association, Sunday, November 8, 1998, ed. Chernick Howard, 233-238. Washington, DC: National Tax Association.
29.
Weiner, Joann M.1999b. Using the experience in the U.S. states to evaluate issues in implementing formula apportionment at the international level. Office of Tax Analysis Paper 83, Washington, DC.
