Browsing by Author "Hicks, Sam A."

Now showing 1 - 4 of 4
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    An empirical investigation of the ability of multinational enterprises to affect their United States income tax liability
    Foster, Sheila Dale (Virginia Tech, 1994-12-13)
    Transfer prices are the prices charged by one party for goods and/or services transferred to a related party. While transfer prices are essential to the goal of profit maximization within the enterprise, difficulties arise over how to establish the "correct" transfer price. For the global enterprise this problem is more acute because different segments of the enterprise operate under different political jurisdictions and are subject to taxation by different political entities. Concerns have been raised by Congress and the Internal Revenue Service regarding whether multinationals, especially foreign-owned multinationals, are using transfer-pricing and cost-allocation policies across international borders to avoid United States income taxes. Generally, testimony before the hearings, limited anecdotal studies, and court case findings have suggested that multinationals do not pay their "fair share". An examination of 336 companies in the chemical industry (STC codes 2800-2899) provided mixed support for the position that multinationals are paying less than their "fair share" of U.S. income taxes. While statistically significant differences were found among the three groups for the cost-ofgood-sold (COGS) ratio (after developmental stage enterprises were removed) and for the worldwide net-profit ratio, no Statistically significant differences were found for tax-rate measures (worldwide effective income tax rate, worldwide effective operating income tax rate, and U.S. effective operating income tax rate) or for the return measures (worldwide return on assets, worldwide operating return on assets, and U.S. operating return on assets). When multinationals (U.S.-controlled and foreign-controlled combined to form a single group) were compared to domestic companies, statistically significant differences were found only for the COGS ratio. When U.S. multinationals were restricted to those companies with 50% or more of both their net sales and average total assets abroad, statistically Significant differences were found for the operating income ratios (both U.S. and worldwide) and for the worldwide net profit ratio, but such differences were found neither for the COGS ratio, the effective-income-tax-rate measures, nor for the return measures. Complicating the issue were: (1) the presence of developing stage enterprises and foreign parent companies among the total group; (2) the use of a 10% cutoff in ownership and operations to determine whether a company is or is not a multinational; and (3) the absence of access to tax or accounting records, resulting in the need to use secondary sources for data. One suggestion for simplifying the transfer-pricing issue is the adoption of a method of formulary apportionment. Ina comparison of the amount of income allocated to U.S. operations under current methods (either specific allocation Or separate accounting) and the amount that would have been allocated under formulary apportionment methods no significant differences were found, suggesting that such a method is worthy of further study.
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    Tax expenditures: report utilization by state policy makers
    Harris, Jeannie E. (Virginia Tech, 1990-06-05)
    Tax expenditures are deviations from a normative tax structure which take the form of exemptions, deductions, credits, etc. Tax expenditure reports show estimates of revenues foregone from tax expenditures. This study investigated report use in ten states by (1) examining tax expenditure reporting processes and report use and (2) applying three path models of technical information use to tax expenditure reports. Data were gathered from report preparers-legislative staff persons and legislators. The adoption of recommended standard features was examined. Commonly adopted core features and innovative features were identified. Examination of tax expenditure reports and reporting processes supports the following findings: (1) The tax expenditure concept has broad acceptance. (2) Reporting achieves an educational objective by facilitating an understanding of tax structure. (3) Use of reports is consistent with the use of technical information in general. (4) Legislators and staff persons share similar perceptions on reporting. (5) The practice of formally comparing tax and direct expenditures has not been widely adopted. (6) Awareness of tax expenditure costs may protect revenues by fostering resistance to new tax expenditures. In the three specified path models of information use, the dependent variable is level of report use. The independent variables in each model represent three theory of information use. The most paths were retained as significant in the information specific model, but the individual attribute model explained the highest percentage of variance in level of use (28.1%). The role constraint model was unsupported. A final combined model, explaining 34.3% of variance in level of use, shows that the information specific and personal attribute models are related. In the combined model: (1) report usefulness has the largest direct and total effect on level of use, (2) the exogenous variables, quality of report communication and fiscal analysis attitude affect report usefulness by affecting the intervening variables, relevance of report and technical quality of report. This suggests report preparers may influence marginally report use by improving report communication and technical quality of reports.
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    Tax information for volunteers
    Hicks, Sam A.; Ostrowski, Barbara Ann, 1942- (Virginia Cooperative Extension Service, 1987-10)
    Provides tax information for volunteer workers.
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    Tax payment-based liquidity effects: using historical evidence of a tax-based January effect to investigate a new seasonal
    Cataldo, Anthony J. (Virginia Tech, 1996-05-27)
    This dissertation used the daily Dow Jones Industrial Average (DJIA) for the 1897 through 1928 period to examine the potential existence of any market reactions, which may have resulted from the imposition and expansion of "withholding at the source" and quarterly and estimated tax payments. Providing for a natural laboratory, this period has previously been used to examine and gain insights into tax-loss selling (TLS) as a possible (partial) explanation for year-end changes in stock prices. Drawing from the methodologies and findings from these studies, this period is examined both (1) in its entirety and (2) as partitioned, using two different operational definitions of the pre-/post-tax period. Additional, contemporary period-based analyses were conducted for the 1918 and 1930 through 1994 periods, using both DJIA and Standard & Poor's (S&P) 500 Composite daily indexes, respectively. The focus was on changes in estimated tax payments dates/event windows to determine the contemporary existence of tax-based liquidity effects. Both historical (1897-1928) and contemporary (1930-1989) period evidence is found in support of the existence of a tax payment-based liquidity effect. Evidence developed over the entire period (1897-1994) suggests that this seasonal continues to exist for the April 15 (combined) tax filing and estimated tax payment date.