Local Tax Authorities Research Articles

The Role of Agents in Fraudulent Activities: Evidence from the Housing Market in China

This paper examines the role that agents play in fraudulent activities in the housing market in China. Using a representative sample of housing transactions in Beijing from 2014 to 2017, we investigate the existence and magnitudes of the so-called Yin-Yang contracts, and explore whether and how agents affect tax evasion. First, we find that agents can learn the monitoring distance of local tax authorities through their cumulative experiences and strategically report prices as close as possible to the internal guideline prices set by local authorities. At the same time, agents' involvement in tax evasion is significantly affected by the tax evasion behaviors of their peers. Second, we show that agents’ work experiences contribute to creating more severe Yin-Yang contracts in the presence of loosening financial constraints, and vice versa. Our results suggest that agents' expertise becomes more important for buyers who face a trade-off between reporting higher to borrow more from the bank and reporting lower to evade taxes.

Tax Sanctions from the Authority Perspective

Tax sanctions are imposed by national and local tax authorities to provide a deterrent effect and encourage taxpayer compliance. This research aims to investigate the application of tax sanctions from the perspective of tax authorities. This is a qualitative research that recruited three informants from the tax authorities in the Surabaya Sawahan Tax Office. In-depth interviews comprised the data collection technique used in this research. Data analysis involved data reduction, data presentation and conclusion, and verification. Results showed that the tax sanctions in the Surabaya Sawahan Tax Office have been implemented in accordance with the legal procedures and regulations. Administrative sanctions can be applied through the issuance of tax collection letters conducted through prior research, and criminal sanctions can be imposed by the tax authorities as a last resort.
 Keywords: Tax sanctions; tax authorities; gijzeling; tax compliance

Exposures at day labor corners: using existing georeferenced data to describe features of urban environments

PurposeLatino day laborers are male immigrants from mainly Mexico and Central America who congregate at corners, that is, informal hiring sites, to solicit short-term employment. Studies describing the occupational environment of Latino day laborers traditionally measure jobsite exposures, not corner exposures. We sought to elucidate exposures at corners by describing their demographic, socioeconomic, occupational, business, built, and physical environmental characteristics and by comparing corner characteristics with other locations in a large urban county in Texas. MethodsWe used multiple publicly available data sets from the U.S. Census, local tax authority, Google's Nearby Places Application Programming Interface, and Environmental Protection Agency at fine spatial scale to measure 34 characteristics of corners with matched comparison locations. ResultsCorners were located close to highways, high-traffic intersections, hardware and moving stores, and gas stations. Corners were in neighborhoods with large foreign-born and Latino populations, high rates of limited English proficiency, and high construction-sector employment. ConclusionsPublicly available data sources describe demographic, socioeconomic, occupational, business, built, and physical environment characteristics of urban environments at fine spatial scale. Using these data, we identified unique corner-based exposures experienced by day laborers. Future research is needed to understand how corner environments may influence health for this uniquely vulnerable population.

Transfer Pricing and the Decision-Making Authority of the Tax Function in Multinational Companies

The allocation of decision rights is a fundamental issue of organizational design. We study the decision-making authority and respective outcomes within firms’ transfer pricing function where tax and managerial objectives typically conflict. Exploring unique survey data on transfer pricing systems of multinational companies, we investigate the extent to which the centralization of decision-making authority at the tax department is associated with (external) tax audit conflicts and (internal) coordination conflicts. We find that disputes with local tax authorities are more likely, i.e. tax risk is higher, when the tax department has ultimate authority over transfer pricing decisions. This result is consistent with theory predicting that central tax managers focus on firm-wide objectives instead of easing local tax audits. Internal coordination, however, seems to be unaffected by the allocation of decision rights to the tax department.

Trust Central Eases Funding Decisions With Data

The Children’s Trust is a local government taxing authority that uses property tax dollars to fund programming for Miami-Dade County children and families. To become more efficient, Trust Central was created and now automates our full business cycle. Data flow is solicitation → contracting → program metrics → solicitation. Agencies apply for funding, contract to provide services, report their progress. Their progress is used to determine future solicitation criteria. Data automatically flows from one module to another.
 Trust Central allowed us to move from using 5 data points to make funding decisions to 24 data points. We were able to look across our various initiatives to ensure that our funding decisions were equitable. Funding decisions were backed by data and easy to share with applicants. We created context and communicated funding decisions in a way that reduced emotional conflicts and appeals. As a reference point, we had 96 appeal meetings last funding cycle - this funding cycle no appeal meetings and only 19 review meetings; a cost savings of $15,850 in meetings. Another reference point, we spent 1 week reviewing data to make funding decisions last funding cycle - this funding cycle we spent 4 weeks reviewing data in a more meaningful and valuable way. We made $68M in funding decisions without any negative feedback from the community. Our relationship with the community pivoted from negative to positive. This is a first for us! We are now positioned to be a mentor for both governmental and non-governmental funders.

The use of Business Property Tax Incentives in Cook County, Illinois

The authors use data on all business parcels and property tax incentives in Cook County to analyze the use of business tax incentives from 2012 through 2014. By law, Cook County commercial and industrial parcels are assessed at 25 percent of market value. Under certain conditions, however, these business parcels can be granted special assessments reduced to a lower fraction of market value (usually 10 or 12 percent) for more than 10 years from the date of the designation. These special assessments, assigned as incentive “classifications,” effectively reduce the tax payments of these parcels by 50 percent or more. More than 2,000 commercial or industrial parcels received special assessments that substantially lowered their property tax liabilities each year. These assessment reductions decreased county-wide property tax collections by approximately $250 million in 2014, which is 5.3 percent of the $4.7 billion of commercial and industrial property taxes that local governments (including school districts) billed in Cook County. Industrial assessment reductions decreased industrial property tax revenue by 20 percent or less in most municipalities, but in a few municipalities the incentives reduced industrial revenue by one half or more. Most municipalities that used commercial assessment reductions lowered commercial property tax revenue by 10 percent or less, but a small number reduced commercial property tax revenue by 30 percent or more. Nearly 50,000 commercial or industrial parcels were located in either Tax Increment Financing (TIF) districts or Enterprise Zones (EZs), making the owners of these parcels eligible for development assistance such as access to land at reduced cost, parcel-specific or larger-scale infrastructure improvements, and sales and income tax reductions. A substantial number of these parcels received property tax assessment reductions as well. Total property tax redirections from local taxing authorities to TIF districts were more than twice the amount of industrial and commercial incentives in Cook County at $644 million in 2014. The data did not allow the authors to analyze the benefits firms obtained due to locations in EZs. The magnitude of incentive use and the interaction of different incentive programs suggest the need for increased scrutiny of their use and greater coordination of their administration.

Impact of US Smoke-free Air Laws on Restaurant and Bar Employment, 1990-2015.

Secondhand smoke exposure is responsible for an estimated 50000 deaths per year among nonsmokers in the United States. Smoke-free air laws reduce secondhand smoke exposure but often encounter opposition over concerns about their economic impact. Expansion of these laws has stagnated and efforts to weaken existing laws may exacerbate existing disparities in exposure. Studies at the state and local levels have found that smoke-free air laws do not generally have an adverse effect, but there are no recent estimates of the impact of these laws nationally. Employment and sales are two measures commonly used to estimate the economic impact of smoke-free air laws. Sales data are gathered by state and local taxing authorities but not uniformly across jurisdictions. Dynamic panel models are used to estimate a population-weighted national average treatment effect of smoke-free air laws on restaurant and bar employment using data from the Quarterly Census of Employment and Wages for 1990 to 2015. A one-percentage point increase in population covered by a restaurant smoke-free air law is associated with a small increase (approximately 0.01%) in restaurant employment (b = .0001, p < .001). The percentage of state population covered by a bar smoke-free air law was not associated with bar employment. Smoke-free air laws are a powerful tool for protecting hospitality workers and patrons from the dangers of secondhand smoke. Using data from over more than two decades, these results suggest that smoke-free air laws in the United States do not generally have any meaningful effect on restaurant and bar employment. Smoke-free air laws are associated with reductions in negative health outcomes and decreased smoking prevalence. Despite this clear public health argument and strong public support, passage of new laws has stagnated and exemptions are being used to weaken existing laws. The ability to make both a health and business case in support of existing laws may also bolster the case for expansion. This study provides an updated look at the economic impact of smoke-free air laws nationally through 2015. The lack of adverse findings provides additional support for these laws as public health win-win.

La coordinación tributaria del comercio y la industria en México: el atropellado camino para el establecimiento del Impuesto Sobre Ingresos Mercantiles (isim)

With the entry into force of the Federal Law of the Isim on January 1, 1948 established the tax with which the federation began the coordination of the tax system of trade and industry in Mexico through a gradual scheme whose progress depended on the signing of coordination agreements between said level of government and the federative entities, which jointly aimed to centralize the branch. This coordination scheme also sought to advance towards the establishment of a tax figure that relied exclusively on consumption (final transactions). In this context, the main objective of the present article is to explain this configuration of double transition implied in the isim, from the problems that the federation faced before its establishment. In this sense, we intend to understand the beginning of the coordination process in this area through the problem of the distribution of the tax authorities that arose between the federal and local tax authorities and the difficulties that the federation faced in order to establish immediately the tax on consumption.

Market Chain Analysis of High Value Fruits in Multan Region

This research aimed at assessing the market chain of banana, avocado and mango fruits in Multan zone. Both primary and secondary data were collected from 2 purposively selected fruits producing districts namely North Multan and South Multan areas. Primary data were collected through semi-structured questionnaire and focus group discussion. A total of 150 households were selected by using systematic random sampling technique. In addition, 40 traders were selected by using simple random sampling technique. Market structure-conduct-performance analysis model was used to assess the performance of the fruits market. The result revealed that the participants in the fruits markets were identified as primary actors and secondary actors. Primary actors in the fruits market chain were producers, brokers/agents/, farmer traders, collectors, and wholesalers. Whereas, local tax authority, local police, transporters, and district Trade and Industry office were identified as secondary actors. Fruits market in the area was characterized by non-competitive nature with concentration ratio ranging from 42 to 91.10% indicating the existence of oligopoly market structure. Entrance and exit in the fruits market was blocked by licensing and access to channel. A channel that links producers to local wholesalers through brokers was more efficient in terms of large volumes of sales. However, performance of the fruits market was affected by seasonality, the existence of few big traders, limited access to information, absence of organized market center and brokers’ interference. Therefore, attention must be given to alleviate the problems to improve the performance of the fruits market.

Market Chain Analysis of HighValue Fruits in Bench Maji Zone, Southwest Ethiopia

This research aimed at assessing the market chain of banana, avocado and mango fruits in Bench Maji zone. Both primary and secondary data were collected from 2 purposively selected fruits producing districts namely North Bench and South Bench districts. Primary data were collected through semi-structured questionnaire and focus group discussion. A total of 150 households were selected by using systematic random sampling technique. In addition, 40 traders were selected by using simple random sampling technique. Market structure – conduct – performance analysis model was used to assess the performance of the fruits market. The result revealed that the participants in the fruits market were identified as primary actors and secondary actors. Primary actors in the fruits market chain were producers, brokers/ agents, farmer traders, collectors, and wholesalers. Whereas, local tax authority, local police, transporters, and district Trade and Industry office were identified as secondary actors. Fruits market in the area was characterized by non-competitive nature with concentration ratio ranging from 42 to 91.10% indicating the existence of oligopoly market structure. Entrance and exit in the fruits market was blocked by licensing and access to channel. A channel that links producers to local wholesalers through brokers was more efficient in terms of large volumes of sales. However, performance of the fruits market was affected by seasonality, the existence of few big traders, limited access to information, absence of organized market center and brokers’ interference. Therefore, attention has to be given to alleviate the problems so as to improve the performance of the fruits market.

ATA Directive: Some Observations Regarding Formal Aspects

In this article the authors analyse to what extent the objectives of the Council of the European Union (EU) and the EU Commission are effectively realized through the ATA Directive. Authors believe that the choice for a Directive is likely not the most effective, while for a substantial period potentially resulting in legal uncertainty regarding the scope of the Directive’s terminology and provisions. The relationship with existing international (tax) treaty obligations is complex as well as with existing income tax Directives. Moreover, the choice for a Directive puts the tax authorities – who have the primary initiative in applying its provisions – in a relative weaker position since under EU law they cannot unlike taxpayers directly apply the Directive’s provisions. Finally, it can be questioned where local tax authorities have the initiative, whether the EU Commission review and monitoring process will be sufficient to safeguard a consistent application of the Directive’s provisions within the EU, creating a level playing field. In view of this, authors conclude that a Regulation or alternatively a peer review mechanism may result in less legal uncertainty and a more effective mechanism to realize the Council of the EU and the EU Commission’s objectives.

Tax Freedom Day in Albania, 2016: Tax Freedom Day in Kosovo and other Balkan countries, 2016

ALTax Center (Albanian Taxation Center) present this document for the fourth time in Albania about the situation of tax burden collected by central and local tax authorities, by 12 regions based on the highest rank until to lowest rank of the ratio of tax burden. The other presentation is about the total tax rates in 2015 in Balkan countries, as well as in Albania and Kosovo. The tax burden is presented comparable with Albanian neighbor countries ratios and also the comparison between tax burdens that is the performance of tax administration of these countries with Total tax rates that is the output of tax policy. The object of the study it is the level of tax burden from one Albanian region to another, pointing to the need to have the ability to increase revenues through comparison with similar regions, in order to finance the costs for central and local investment. On the other hand, every citizen who is contributor to the government budget should be recognized what’s the burden that bear in relation to citizens in other regions of Albania and the Balkans, and especially in Kosovo. The results of this study are based on income derived by residents under the residence principle where they belong, without excluding tax revenues from large taxpayers of the country (included under the address of residence), who meet around 50% of the total tax revenue for both levels of tax administration. The statistics for regions are also subject to analysis as data comparing the budgetary programs, the level of performance and different sources. The structure of this paper consists of two parts. The first part is the presentation of statistical data at the international (Balkan) level. The second part is an analysis and interpretation of regional rankings under the tax burden.

Taxation of Foreign Multinational Enterprises Conducting Business in and with Saudi Arabia

In this article, the author considers the tax implications of Saudi Arabian domestic law (outbound payments, permanent establishment issues) and the tax treaties that Saudi Arabia has concluded for multinational enterprises doing business in and with Saudi Arabia. The article also provides insights into the practices of local tax authorities.

Hunting Animals in a Zooo? Regulating Indonesia's High Wealth Individual Taxpayers

This paper examines the rise and fall of a special purpose High Wealth Individual (HWI) unit in the Indonesian Directorate General of Taxation (DGT), 2009-2012. Fifty-four participants and observers of the implementation process reported on the contest over the principles and mechanisms of tax reform. The new HWI unit initially brought enthusiasm and dialogue about building relationships with taxpayers and assembling integrated databases of HWI business interests. These ideas, however, conflicted with past institutional practices. Revenue targets assigned to local tax authorities by head office trumped the new unit’s priorities. Messaging within the tax authority that the unit would increase revenue collections was not shared with HWIs and their advisers. Assumed deception triggered cynicism that nothing had changed in DGT. The unit failed to perform to expectations. The research shows how local institutions and tax culture can wreak havoc on transfers of international best practice in tax policy.

The Power to Destroy: Discriminatory Property Assessments and the Struggle for Tax Justice in Mississippi

THE PROPERTY TAX HAS JUSTLY RECEIVED MANY PEJORATIVE LABELS over course of American history. It has been called the worst tax. (1) Its administrators have been derided as most corrupt, incompetent, and unfaithful of public servants. (2) So routine were legal challenges to property tax assessments by corporations that in 1937 U.S. Congress passed legislation that established principle of pay-first-then-litigate so as to prevent cities and counties dependent on this revenue source from going broke. (3) But of all negative labels observers have pinned to property tax, one stands out as particularly inaccurate: its randomness. Instead, a given property's assessment has more often reflected status of its holder than its market value, which itself was a reflection of status of its holder. (4) The Jim Crow South has become synonymous with white supremacy in its most raw, naked form. But while brutal and exploitative labor systems, political demagoguery, antiblack violence, and specter of racial terrorism formed Jim Crow's foundation, a more subtle, sophisticated set of racist policies and administrative practices served as its last line of defense and, ultimately, proved to be most effective in fortifying white supremacy for generations. There was, as historian N. D. B. Connolly describes, increasing professionalism to white racism beginning in 1940s and evolving, in both form and substance, alongside and in conjunction with expanding powers and scope of modern American state. (5) No governmental body in United States was more suited for this new era in white supremacist governance than local taxing authorities, where white political power and economic advantage had been woven into obscure, highly specialized, and dimly understood policies and practices. In early- to mid-twentieth-century rural South, local tax assessors played an instrumental, if unappreciated, role in enforcing color line and preserving forms of race-based exploitation that were central to Jim Crow political economy as a whole. And as black freedom movement took flight, it was in property tax where Jim Crow took refuge and where white supremacists worked to reconstitute some of its administrative apparatus. An assessment, as distinct from an appraisal, is amount of a property's total value that is subject to taxation. The percentage of a property's appraised value used to determine an assessment varies by state and locality, as does formula used to determine that value. In contrast to other forms of taxation in United States, property tax rate within a given city or county is determined by amount of tax revenue government needs to raise. The total assessed value of all taxable property within a given city or county thus determines tax (or, millage) rate for all property taxpayers. (6) This means that a tax reduction for one property (or a group of properties) is equivalent to a tax hike on all other properties, and vice versa. An assessment that might appear fair and accurate can in fact be utterly unfair and force its owner to shoulder an unjust tax burden if other properties within city or county are assessed at a lower percentage of their appraised value. Not only does assessor's office make those determinations, but it also holds data and analytical tools taxpayers need in order to determine if they are being taxed fairly. Assessors' offices have abused their powers with impunity. Beholden only to voting public and given virtually free rein over their duties, assessors have routinely undervalued property and adjusted assessment rates downward for key constituents and, conversely, overvalued property and adjusted rates upward for those who lack political influence or bargaining power. (7) The complicated and, for average taxpayer, bewildering formula used to determine a property owner's tax liability, relative nature of over- and undertaxation, and assessor's ability to control access to information essential to uncovering, much less contesting, unfair or discriminatory practices help explain why this obscure, low-level bureaucratic institution became synonymous with corruption, cronyism, and favoritism. …

A tragedy of the anticommons: local option taxation and cell phone tax bills

When multiple taxing jurisdictions overlap and fail to account for one another’s actions, they over-tax the common base. This is a prediction of the anticommons model, in which numerous parties have authority to exclude others from using a resource. This model further predicts that when governments over-tax the base, private parties will underutilize the resource, and underutilization will be greater as the number of parties with exclusion rights rises. We test these predictions by studying cell phone taxation and local option tax authority, which allows some cities, counties, and special-purpose districts to levy taxes on cell phone use. Consistent with theory, we find that the tax rate on cell phone service is higher when local governments have the option to tax. Further, the percentage of households owning cell phones is lower when there is the local option to tax, and ownership rates fall with the number of taxes levied.

Voluntary disclosure of evaded taxes — Increasing revenue, or increasing incentives to evade?

Many countries apply lower fines to tax evading individuals when they voluntarily disclose the tax evasion they committed. I model such voluntary disclosure mechanisms theoretically and show that while such mechanisms increase the incentive to evade taxes, they nevertheless increase tax revenues net of administrative costs. I confirm the importance of administrative costs in a survey of German competent local tax authorities. I then test the effects of voluntary disclosure on the tax evasion decision, using the introduction of the 2009 offshore voluntary disclosure program in the U.S. for identification. The analysis confirms that the introduction of voluntary disclosure increases tax evasion.

Local Fiscal Allocation for Public Health Departments.

We examined the percentage of local government taxes ("fiscal allocation") dedicated to local health departments on a national level, as well as correlates of local investment in public health. Using the most recent data available--the 2008 National Association of City and County Health Officials Profile survey and the 2007 U.S. Census Bureau Census of Local Governments-generalized linear regression models examined associations between fiscal allocation and local health department setting, governance, finance, and service provision. Models were stratified by the extent of long-term debt for the jurisdiction. Analyses were performed in 2014. Average fiscal allocation for public health was 3.31% of total local taxes. In multivariate regressions, per capita expenditures, having a local board of health and public health service provision were associated with higher fiscal allocation. Stratified models showed that local board of health and local health department taxing authority were associated with fiscal allocation in low and high long-term debt areas, respectively. The proportion of all local taxes allocated to local public health is related to local health department expenditures, service provision, and governance. These relationships depend upon the extent of long-term debt in the jurisdiction.

Wyłączenie samorządowych organów podatkowych oraz ich pracowników – uwagi de lege lata oraz de lege ferenda

This article aims to analyse legal regulations concerning the exclusion of local tax authorities from the settlement of tax matters and their employees from participating in tax proceedings, to assess existing solutions and to propose changes in law. The analysis of legal regulations has led the author to the conclusion that the application of the provisions concerning the exclusion of local government taxes and their employees are related to numerous problems, including these regulations do not apply in all those situations where there is a risk of lack of impartiality of the tax authorities or its employees. In the author's opinion analysis of legal regulation led to the conclusion that legislator do not take into account the specificity of local tax authorities. The study proposes the conversion of legislative provisions relating to the exclusion of tax authorities and their employees, which resulted in increased activity will guarantee a fair tax administration.

Tax Freedom Day in 2015 in Albania

AL-Tax Center (Albanian Taxation Association) present in this document for the third time in country about the estimation of tax burden collected by central and local tax authorities, by 12 regions based on the highest rank until to lowest rank of the ratio of tax burden. The tax burden is comparable with regional countries ratios and biggest countries of the world.The purpose of the presentation of estimation is to have the attention of lawmakers and media, as far as good also to attire the attention of critics and scholars that perhaps could have opinions about this study or have questions in regard of the methodology, or want to know better the sources of information, or have other specific questions. The estimation and calculation used in this document are based on different sources, internal and external ones.The object of the presentation is the level of tax burden from one Albanian region to another, pointing to the need to have the ability to increase revenues through comparison with similar regions, in order to finance the costs for central and local investment. On the other hand, every citizen who is contributor to the government budget should be recognized that as is the burden that holds in relation to citizens in other regions of Albania and the Balkans.