We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
Strategic Cost Shifting and State Tax Minimization.
- Authors
Hall, Curtis M.; Lusch, Stephen J.
- Abstract
In this study, we predict and find that multistate bank holding companies strategically allocate costs among their subsidiary banks to minimize tax. In particular, we find that high tax subsidiary banks report higher costs than low tax subsidiary banks within the same bank holding company. Additional tests provide evidence of cost shifting rather than operational differences among states. In particular, we find that high tax subsidiary banks of multistate bank holding companies report higher costs than single-state banks in the same high tax state. Our study provides a unique contribution to the cost allocation and tax management literature by directly linking tax reduction incentives to cost allocation and documenting an alternative type of state tax-minimization strategy in the banking industry. JEL Classifications: M41; H25; H71; G21.
- Subjects
COST allocation; BANKING industry; TAX cuts; SUBSIDIARY corporations; MULTISTATE taxation
- Publication
Journal of Management Accounting Research, 2018, Vol 30, Issue 1, p55
- ISSN
1049-2127
- Publication type
Article
- DOI
10.2308/jmar-51699