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Implementing State Corporate Income Taxes in the Digital Age

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  • McLure, Charles E. Jr.

Abstract

This paper reviews issues in application of the state corporate income tax to income from electronic commerce. After examining potential arguments for the tax (benefit principle, ability -to-pay, and entitlement), problems inherent in the tax (complexity and distortions of locational decisions), and the basic structure of the tax (the choice between separate reporting and formula apportionment, the role of unitary combination, and the choice of apportionment factors), it discusses two key issues in implementation of corporate income taxes: nexus (jurisdiction to tax) and determination of the income to be taxed by a particular state that invokes nexus.

Suggested Citation

  • McLure, Charles E. Jr., 2000. "Implementing State Corporate Income Taxes in the Digital Age," National Tax Journal, National Tax Association;National Tax Journal, vol. 53(4), pages 1287-1305, December.
    • Handle: RePEc:ntj:journl:v:53:y:2000:i:4:p:1287-1305
    DOI: 10.17310/ntj.2000.4S2.02
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    References listed on IDEAS

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    1. Charles E. McLure Jr., 1981. "The Elusive Incidence of the Corporate Income Tax: The State Case," Public Finance Review, , vol. 9(4), pages 395-413, October.
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    Cited by:

    1. Charles E. McLure, Jr., 2002. "Thinking Straight about the Taxation of Electronic Commerce: Tax Principles, Compliance Problems, and Nexus," NBER Chapters, in: Tax Policy and the Economy, Volume 16, pages 115-140, National Bureau of Economic Research, Inc.
    2. Rahul Mukherji, 2002. "Governing The Taxation Of Digitized Trade," ASARC Working Papers 2002-05, The Australian National University, Australia South Asia Research Centre.
    3. Joann Martens Weiner, 2005. "Formulary Apportionment and Group Taxation in the European Union: Insights from the United States and Canada," Taxation Papers 8, Directorate General Taxation and Customs Union, European Commission, revised Mar 2005.
    4. Charles E. McLure, Jr., 2008. "Harmonizing Corporate Income Taxes in the European Community: Rationale and Implications," NBER Chapters, in: Tax Policy and the Economy, Volume 22, pages 151-195, National Bureau of Economic Research, Inc.
    5. Michael Smart & Francois Vaillancourt, 2021. "Allocating taxable income for provincial corporate income taxation in Canada, 2015-2017: practice and analysis," SPP Briefing Papers, The School of Public Policy, University of Calgary, vol. 14(3), January.

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