Abstract
ABSTRACTThis study examines the effect of legal environment on corporate state income tax avoidance. We find that the extent of penalties on corporate officers reduces state tax avoidance. However, we find no evidence that the extent of penalties on shareholders reduces state tax avoidance. Thus, the legal environment faced by managers has a greater deterrent effect on tax avoidance than does the legal environment faced by shareholders. Only when managerial ownership is high do we find evidence that shareholder penalties affect corporate tax avoidance behavior. Our study contributes to the literature on agency problems related to corporate tax reporting.JEL Classifications: H25; H26; H71; K34.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
