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Article
Publication date: 29 June 2012

Rudie Nel and Gerhard Nienaber

Since its introduction in South Africa during 2009, the ability of vehicle emissions tax to reduce CO2 emissions has been questioned, but not yet assessed. The purpose of…

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Abstract

Purpose

Since its introduction in South Africa during 2009, the ability of vehicle emissions tax to reduce CO2 emissions has been questioned, but not yet assessed. The purpose of this paper is to attempt such an assessment by considering tax designs to reduce passenger vehicle CO2 emissions.

Design/methodology/approach

In this exploratory study, the authors reviewed literature on tax designs to reduce CO2 emissions, and compared the design of current taxes on passenger vehicles in South Africa to the tax designs most advocated in the literature to evaluate the effectiveness of the current South African design for this purpose.

Findings

Tax designs refer to the stage when taxes are levied (purchase/ownership/usage taxes) – levying taxes at one stage may more effectively reduce emissions than levying them at another. The current tax focus on consumers may indeed affect taxes' ability to reduce emissions, and in the current tax mix, taxes on passenger vehicles may not be the most effective way of reducing emissions. The investigation of a “feebate” policy as an alternative initiative to address increased passenger vehicle CO2 emissions is recommended.

Originality/value

Only anecdotal evidence questions the ability of the vehicle emissions tax to reduce CO2 emissions. This study is intended to elicit further discussions on other fiscal reform initiatives aimed at reducing CO2 emissions by passenger vehicles in South Africa.

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Article
Publication date: 4 December 2017

Maartje Poelman, Willemieke Kroeze, Wilma Waterlander, Michiel de Boer and Ingrid Steenhuis

The purpose of this paper is to examine the effectiveness of three food taxation schemes on energy (kcal), saturated fat (gram) and sugar (gram) purchased in the virtual…

Abstract

Purpose

The purpose of this paper is to examine the effectiveness of three food taxation schemes on energy (kcal), saturated fat (gram) and sugar (gram) purchased in the virtual supermarket.

Design/methodology/approach

Based on the literature, three food taxation schemes were developed (sugar tax, saturated fat tax and a nutrient profiling tax) and implemented in the three-dimensional virtual supermarket. A randomized control trial was conducted to determine the differences in the amount of energy (kcal), saturated fat (gram) and sugar (gram) purchased for a one-week food basket.

Findings

In total, 191 Dutch adults were randomly assigned to a sugar-tax condition (n=48), a saturated fat-tax condition (n=37), a nutrient profiling-tax condition (n=62) and a control (no-tax) condition (n=44). Fully adjusted models indicated that compared to the no-tax condition, no significant effects of a sugar-tax condition (B: −2,041 kcal (95% CI −5,350 to 1,914)), saturated fat-tax condition (B: −2,717 kcal (95% CI −6,596 to 1,163)) or nutrient profiling-tax condition (B: −1,124 kcal (95% CI −4,538 to 2,292)) were found on the amount of energy purchased. Also, none of the taxation schemes showed significant effects on saturated fat or sugar purchased.

Originality/value

This is one of the first randomized controlled trials testing the effectiveness of a variety of food taxes in the virtual supermarket. This preliminary study provides important directions for future research (the design, results, as well as the lessons learned with respect to recruitment, incentives and technology).

Details

British Food Journal, vol. 119 no. 12
Type: Research Article
ISSN: 0007-070X

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Book part
Publication date: 30 September 2019

M. Elizabeth Howard, Robert A. Seay and Ryan A. Seay

Online retailers often lack nexus within a purchaser’s home state and do not collect sales tax at the point of sale. Consumers exacerbate the loss of tax revenue by…

Abstract

Purpose

Online retailers often lack nexus within a purchaser’s home state and do not collect sales tax at the point of sale. Consumers exacerbate the loss of tax revenue by typically not remitting the use tax on these purchases. To date, very little research addresses the effectiveness of methods to increase use tax compliance, and the need for more work is well documented in the literature.

Design

This study examines, in a controlled economics-based experiment, the effectiveness of current approaches to close the use tax gap. Participants are randomly assigned to one of three treatments to determine the extent to which they would voluntarily pay use tax on a purchase transaction. The experiment mimics the natural environment and measures the participants’ actual compliance with cash payouts.

Findings

We find individuals are significantly more likely to pay the use tax when given detailed information about their online purchases and the use tax obligation compared to only receiving a description of the use tax. We also find compliance is significantly higher when individuals have a separate state income tax line on which to report use tax liability.

Value

Unlike personal income tax compliance, consumers are more likely to evade use tax payments because taxing authorities are usually unable or unwilling to audit consumer purchases. This makes an examination of the effectiveness of reporting and collection methods worthwhile. This study measures use tax compliance based on actual consumer behavior with real economic consequences rather than taxpayer intentions, as reported in prior work. This is important because intentions and behavior are often different, especially in an economic setting. Finally, policymakers will benefit from an effectiveness-assessment of actual methods, rather than hypothetical and potentially unfeasible approaches, to try and increase use tax compliance.

Details

Advances in Accounting Behavioral Research
Type: Book
ISBN: 978-1-83867-346-8

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Article
Publication date: 1 March 2004

John L. Mikesell

The retail sales tax has provided a strong foundation for American state government finance since its beginnings in the Great Depression. However, its position as a…

Abstract

The retail sales tax has provided a strong foundation for American state government finance since its beginnings in the Great Depression. However, its position as a productive, reliable, and administrable revenue source is now under challenge from three forces. First, it continues as a tax primarily on purchases of tangible personal property, despite the shift in consumption toward services. Second, the physical presence rule for taxation of sales by remote vendors creates an intolerable imbalance between local and remote sellers. And third, legislatures keep gnawing away at the base with politically attractive but fiscally unjustifiable exemptions. In total, the position of the sales tax as a viable and defensible revenue alternative is at risk.

Details

Journal of Public Budgeting, Accounting & Financial Management, vol. 16 no. 1
Type: Research Article
ISSN: 1096-3367

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Book part
Publication date: 4 December 2012

Terrance Jalbert and Gary M. Fleischman

This paper examines the optimal use of tax incentives relating to the Hawaii sales, use and excise tax. While many states offer exemptions to these taxes, Hawaii is the…

Abstract

This paper examines the optimal use of tax incentives relating to the Hawaii sales, use and excise tax. While many states offer exemptions to these taxes, Hawaii is the only known state that ties its excise tax credit to the depreciation method used on the state income tax return. Therefore, the purpose of this study is to use the Hawaii business tax context to illustrate the complex trade-offs and year-by-year analyses that small businesses often must employ in the presence of shifting federal tax policy that indirectly influences state tax structures because of tax coupling. Federal and Hawaii taxpayers can elect to expense depreciable property using the 179 expensing provision or to depreciate using the modified accelerated cost recovery system (MACRS). We develop a model that will help non-corporate small businesses in Hawaii determine their optimal tax cost recovery strategy: (1) Utilize Hawaii Section 179 immediate expensing on purchases of tangible personal property, or alternatively (2) Employ MACRS depreciation on these purchases combined with the Hawaii Capital Goods Excise Credit. Our modeling separately considers the possibility that the proprietor jointly makes the federal and Hawaii cost recovery decision, as well as the alternative possibility that these cost recovery decisions are made independently.

The study illustrates that the interaction of federal and state law differences exacerbated by frequent tax changes may cause significant tax compliance complexity and resulting confusion for small non-corporate business taxpayers who are generally not equipped to wrestle with such issues. From a policy perspective, states may wish to minimize complexity using coupling efforts with federal law or otherwise routinely revisit outdated state tax statutes that indirectly cause unintended tax consequences. States must be cognizant, however, that their own budget constraints may worsen if they fully couple with recent generous federal Section 179 expensing limits.

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Book part
Publication date: 19 October 2020

Lixuan Zhang, Eric Smith and Andrea Gouldman

This study examines the impacts of three individual values on the willingness to pay and perceived fairness of use tax on Internet purchases. Analysis of survey data…

Abstract

This study examines the impacts of three individual values on the willingness to pay and perceived fairness of use tax on Internet purchases. Analysis of survey data collected from 114 taxpayers reveals that while a strong sense of national identity is significantly correlated with fairness perceptions of use tax, it is not significantly related to perception of willingness to pay use tax. Our findings suggest that taxpayers with a high level of religiosity are more willing to pay use tax, although they do not perceive the use tax to be fair.

Details

Advances in Taxation
Type: Book
ISBN: 978-1-83909-185-8

Keywords

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Article
Publication date: 3 August 2010

James M. Williamson, Michael P. Brady and Ron Durst

The purpose of this paper is to examine the use of Section 1031 of the Internal Revenue Code (IRC), a piece of US tax law that allows for tax‐deferred exchanges of…

Abstract

Purpose

The purpose of this paper is to examine the use of Section 1031 of the Internal Revenue Code (IRC), a piece of US tax law that allows for tax‐deferred exchanges of like‐kind property.

Design/methodology/approach

The paper derives a theoretical premium value for exchanges and presents the first national level analysis of Federal tax data on the use of like‐kind exchanges involving farmland between 1999 and 2005.

Findings

There is significant interest in Section 1031 from stakeholders in rural communities because there is widespread belief that the recent growth in farmland values may have, in part, been stimulated by Section 1031 exchanges of farmland. Despite these concerns, little is known about the extent of such exchanges.

Originality/value

This paper provides insight into the value and use of the IRC's Section 1031 provision. Based on simulations of a theoretical model using plausible assumptions about asset growth, the paper shows how proposed tax changes will affect the tax value of the deferral.

Details

Agricultural Finance Review, vol. 70 no. 2
Type: Research Article
ISSN: 0002-1466

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Article
Publication date: 1 July 1941

THE Purchase Tax is in essence a tax which is payable by the consuming public, although the tax will generally be levied at some stage in the history of the goods, prior…

Abstract

THE Purchase Tax is in essence a tax which is payable by the consuming public, although the tax will generally be levied at some stage in the history of the goods, prior to their delivery to the public.

Details

Aircraft Engineering and Aerospace Technology, vol. 13 no. 7
Type: Research Article
ISSN: 0002-2667

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Article
Publication date: 1 March 2004

Amna C. Cameron

The loss in sales tax revenue from nontaxable remote sales erodes a state’s ability to fund essential programs. Taxable goods sold via the Internet in 1999 created a loss…

Abstract

The loss in sales tax revenue from nontaxable remote sales erodes a state’s ability to fund essential programs. Taxable goods sold via the Internet in 1999 created a loss to state and local governments of $525 million in sales tax revenue. This study examines the effects of five variables on a state’s willingness to participate voluntarily in the Streamlined Sales Tax Project (SSTP). Three hypotheses are supported: 1) the higher the grade on the Business Vitality score, the more likely elected officials will be influenced by the private sector and state economic development personnel not to participate in the SSTP; 2) the higher the index of innovation capacity, the more likely elected officials will be influenced by businesses not to participate; and 3) the greater the reliance on sales tax, the more likely a state will participate.

Details

Journal of Public Budgeting, Accounting & Financial Management, vol. 16 no. 1
Type: Research Article
ISSN: 1096-3367

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Article
Publication date: 1 January 1973

Robert H Grimsley

The basic differences between VAT and purchase tax, apart from the wider range of goods and services subject to the new tax are:

Abstract

The basic differences between VAT and purchase tax, apart from the wider range of goods and services subject to the new tax are:

Details

Retail and Distribution Management, vol. 1 no. 1
Type: Research Article
ISSN: 0307-2363

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