Issued also as Thesis (Ph. D.)--Columbia University. / Bibliography: p. 192-195.

"Submitted as a doctoral dissertation at Harvard in 1914, and is now published, after a thorough revision"--Pref. / Includes index. Reproduction of original from Harvard Law School Library. Includes bibliographical references (p. 641-655).

Throughout this thesis three main factors have been identified that can be out of significance for transfer pricing in multinational companies if the proposal for Home State Taxation is adopted. These factors are rules for calculation of the tax base, rules for dividing costs over periods and the tax rate. The formula for sharing profits will also become a factor that can have an impact on the European companies'incentives for transfer pricing interacting with above-mentioned factors. The effects of transfer pricing aiming at reducing the total amount of the taxation burden for a group of companies will be strongly reduced in the future if the proposal is adopted. Incentives for transfer pricing will loose importance, though not disappear altogether. Nevertheless new incentives to evade the rules may arise, especially in terms of careful choices concerning the establishment of every company in the group. The most positive effect of the proposal will probably be that the uncertainty of determining which transfer pricing rules apply will disappear, as only the system of rules of one country will be used for the calculation of the base for taxation. The double taxation, which has caused problems in the past since different rules for transfer pricing gave been applied, will disappear resulting in less costs for companies.

<p>Throughout this thesis three main factors have been identified that can be out of significance for transfer pricing in multinational companies if the proposal for Home State Taxation is adopted. These factors are rules for calculation of the tax base, rules for dividing costs over periods and the tax rate. The formula for sharing profits will also become a factor that can have an impact on the European companies'incentives for transfer pricing interacting with above-mentioned factors. The effects of transfer pricing aiming at reducing the total amount of the taxation burden for a group of companies will be strongly reduced in the future if the proposal is adopted. Incentives for transfer pricing will loose importance, though not disappear altogether. Nevertheless new incentives to evade the rules may arise, especially in terms of careful choices concerning the establishment of every company in the group. The most positive effect of the proposal will probably be that the uncertainty of determining which transfer pricing rules apply will disappear, as only the system of rules of one country will be used for the calculation of the base for taxation. The double taxation, which has caused problems in the past since different rules for transfer pricing gave been applied, will disappear resulting in less costs for companies.</p>

This dissertation consists of three separate but interrelated studies examining the antecedents and consequences of sales and use tax (SUT) policy. The first study investigates whether elements of the SUT system influence elements of economic development, and tests whether SUT rates and/or bases influence state-aggregated levels of capital expenditures and employment within the manufacturing sector from 1983-2006. Results indicate that elements of the tax base (i.e., SUT exemptions) affect these indicators of economic development, but the same relationship was not seen for SUT rates. The second study examines individual taxpayer compliance across different tax settings (i.e., the state use tax compared to the federal income tax) and tests whether differences in detection mechanisms, social norms, or ignorance explain these differences in compliance. Based on a final sample of 148 taxpayers, results show that social norms had an important influence on tax compliance differences across tax settings. The third study investigates the antecedents of states' adoption of the Streamlined Sales & Use Tax Agreement (SSUTA) using both a cross-sectional empirical model and an in-depth qualitative case study of three states. Both the model and case study suggest that governmental interest groups, rather than businesses, play an important role in the adoption of inter-jurisdictional tax policy changes. Overall, the three studies within this dissertation all advance the SUT literature by using various theoretical perspectives and methodological approaches to demonstrate that governmental interest groups influence the adoption of SUT policy (antecedents), and that SUT provisions in turn influence business and individual decisions alike (consequences).