Managing annual accounting reports to avoid state taxes: An analysis of property-casualty insurers

被引:20
作者
Petroni, KR [1 ]
Shackelford, DA
机构
[1] Michigan State Univ, E Lansing, MI 48824 USA
[2] Univ N Carolina, Chapel Hill, NC USA
关键词
accounting reports; state taxation; property-casualty insurance companies; income shifting;
D O I
10.2308/accr.1999.74.3.371
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
We hypothesize that, in their annual accounting reports, property-casualty insurers allocate premiums from multistate policies to reduce total state taxes. To test this prediction, we exploit the industry's unique state tax disclosures. We examine firm-level data, collected from the publicly available, statutory reports filed with each state government. Reported premiums at the insurer-state level, scaled by incurred losses, are regressed on state tax measures. Consistent with tax-motivated income shifting, we find the premium-loss ratio is decreasing in state tax rates. The negative relation is greatest for insurers specializing in multistate lines of business.
引用
收藏
页码:371 / 393
页数:23
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