Defining a Unitary Business: An Economist's View / Charles E. McLure, Jr..

Format:

Book

Author/Creator:

McLure, Charles E, Jr.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w1125.

NBER working paper series no. w1125

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Defining a Unitary Business

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1983.

Summary:

The definition of a unitary business has figured prominently in several recent decisions of the U.S. Supreme Court on the constitutionality of state corporate income taxes. This paper employs economic analysis to frame a three part test of whether a unitary business exists. Underlying the tests is the notion that a unitary business exists when separate accounting can not satisfactorily isolate the profits of individual firms. The first test is common control. The second is whether transfer prices on transactions within the group could be manipulated or are diificult to verify or substantial vertical integration, shared costs,economies of scale or scope, or other forms of economic interdependence make isolation of profits of affiliated firms impossible.The third test is one of substantiality.

Notes:

Print version record

May 1983.