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Over the past decade more than 20 states have begun to offer tax credits to angel investors in an attempt to increase state economic growth. These credits are intended to increase new venture investment, create high‐paying and knowledge‐based jobs, and increase tax revenue collections, but there is some debate over costs and benefits associated with these credits. This paper aims to investigate this issue.

This paper will examine the implementation and perceived effectiveness of tax credit programs in Hawaii, Louisiana, Wisconsin, Minnesota, Oregon, and Vermont. These states were chosen for this research sample based on their differing physical locations within the USA and the uniqueness of the characteristics of each state's chosen tax credit program.

The paper reveals that state investment tax credit programs vary widely in areas of eligibility, level of funding available per investment and per year, and whether or not the credits are refundable. All of these factors can cause significant variability in effectiveness of a state program.

Recommended criteria for achieving an outcome that may result in lawmaker support for tax credit incentives will be outlined based on the success, trial, and error of various state programs. These criteria will allow some commonality in analysis of potential or ongoing incentive programs.

This paper provides an analysis of the various existing state investment tax credit programs and identifies characteristics of such programs that may, if used during program formation, result in greater confidence by lawmakers in the program's overall effectiveness and provide a greater commitment to program success.

I examine patterns of making or deferring strategic repatriations that firms can use to either meet analysts' forecasts or defer to maintain future reported earnings flexibility. First, I examine the extent to which firms repatriate earnings from high foreign tax subsidiaries to decrease US tax expense, resulting in increased net income and lower cash taxes. Using federal tax return information, I find evidence that firms strategically repatriate these earnings to meet or beat current analysts' forecasts. Next, I find evidence that firms that are able to obtain current year tax reductions defer these repatriations in an attempt to build cookie-jar reserves. Lastly, I find that firms do not disclose high foreign tax repatriations (HTRs), even when required by SEC rules. This study contributes to the earnings management, tax avoidance, and disclosure literature by examining a discretionary tax planning strategy.

This chapter evaluates the effectiveness of states' research and development (R&D, used to represent creditable research expenses) tax credits. Prior studies report mixed results on the effect of state R&D tax credit incentives. Generally, such studies consider the influence of state R&D tax credits by applying the statutory income tax and R&D credit tax rates. We reexamine the effect of a state's entire tax burden instead of the statutory tax rates in moderating the effectiveness of a state's R&D tax credit incentives. After controlling for several nontax factors, such as the workplace environment, political environment, and workforce education levels in a regression analysis during the 2010–2013 period in 50 states, we find that statewide private-sector R&D spending is a positive function of the R&D tax credit and this effect increases with the overall level of the state tax burden. We attribute this finding to the fact that high tax burdens increase the present value of the R&D tax credits.

Are franking credit balances priced? This paper aims to investigate the valuation of franking credit balances via a determinant analysis and value relevance analysis.

The determinant analysis examines the factors that contribute to the increasing cumulative level of franking credit balances. Value relevance studies explore whether franking credit balances are priced in the market.

The results provide strong evidence of a size effect that the level of franking credit balances increases with firm size and weak evidence of an international focus effect that the level of franking credit balances increases with international ownership. They also find an individual dividend clientele effect that the level of franking credit balances decreases with individual ownership. They find significant evidence that franking credit balances are priced in the market. One dollar of franking credit is worth 1.4 dollars in firm value. That franking balances are capitalized at more than their face value suggests that franking credits signal firms' future dividend policy. They also find that the market valuation of franking balances increases with firm size but decreases with international focus.

This study provides direct evidence that franking credit balances are capitalized into equity prices. In the determinant analysis, this paper improves Heaney's (2009) model by using the percentage of international ownership as the proxy of international focus, thus addressing the limitation of his measure. In the value relevance tests, the study uses a modified model that includes log-transformation to reduce the skewness of variables based on Tanza's (2014) value relevance model. Moreover, the study suggests that the market valuation of franking credit balances increases with firm size, which contradicts Heaney's (2009) findings.

The purpose of this paper is fourfold: to provide an overview of the alternative simplified credit (ASC) and a basic understanding of how it works; to provide a brief history of the research and experimentation credit as a whole and its evolution; to emphasize the importance of this credit to companies in maintaining a commanding research and development presence in the USA; and lastly to discuss hot topics/issues relating to the taxpayer as they pertain to capturing the maximal value of qualifying research expenditures (QREs) and sustaining this credit upon IRS examination.

The driver for this article came from interviews and discussions with CEOs, Vice Presidents, VPs of Tax and Director level engineers and scientists over the past two years who have demonstrated great interest in capturing the benefits from the credit but was unclear as to how to proceed.

Directors overseeing research and development commonly misclassify research and development expenses as something else. For example, specialized computer software that is used in research and development may be misclassified as general and administrative expenses. Other times, companies performing research and development do not realize that the work they perform qualifies for the research and experimentation tax credit. Consultants can potentially save a significant amount of tax dollars by carefully examining client records, interviewing client personnel to gain an understanding of a client's R&D spend to see if reclassification is possible and justifiable.

The author clearly describes the workings of the ASC and the status of the research and experimentation credit as a whole. The paper provides an overview of the subject, and is written so that the messages can be understood by senior management who do not necessarily possess highly tax technical knowledge. It also touches upon some interesting aspects of optimization as they relate to capturing and defending the research and experimentation credit. The author's ideas of integrating operations management and operations research tools and methodologies in optimizing the defensibility of the research and experimentation tax credit are novel and appear to be very promising.

Biotechnology is now considered a key emerging sector in Ireland's economic landscape. Defined as the ‘application of scientific and engineering principles to the processing of materials by biological agents’ (Forfás Report, 2005), biotechnology is now the main high-technology driver affecting industries as diverse as food, agriculture human health and environmental protection. In 2002 it was estimated that over 400,000 people worldwide were employed in biotech (InterTradeIreland, 2002), with the market for biotechnology products worth an estimated 100 billion (European Commission, 2002). However, according to the Technology Foresight Ireland Report (1999), these figures are predicted to increase significantly, with the expectation that, by the end of 2006, the biotechnology sector will be worth an estimated 250 billion and will employ more than three million workers.

The purpose of this study is to evaluate the impact of research and development (R&D) subsidies and tax credits on the innovative processes of Chilean firms.

Probit and tobit models for pseudo-panel with instrumental variables are estimated using data from different versions of the Innovation Survey covering the period 2007–2016.

The results show that R&D subsidies and tax credits have a statistically significant and positive effect on the probability of performing internal and external R&D, but do not affect the intensity of R&D spending, reflecting a crowding-out effect on private funds of both instruments. On the other hand, firms that simultaneously receive R&D subsidies and tax credits have a lower percentage of innovative sales. Furthermore, there are not effects statistically significant of the R&D subsidies and/or tax credits on the number of intellectual property rights applications.

It is concluded that both instruments have not been effective to encourage innovative outputs in Chilean firms.

Este estudio evalúa el impacto de los subsidios e incentivos tributarios para investigación y desarrollo (I&D) sobre los procesos innovativos de las firmas chilenas.

Se estiman modelos Probit y Tobit con variables instrumentales para pseudo-panel a partir de datos provenientes de diversas versiones de la Encuesta de Innovación que cubren el periodo 2007–2016.

Los resultados muestran que los subsidios e incentivos tributarios para I&D tienen un efecto positivo y estadísticamente significativo sobre la probabilidad de realizar I&D interna y externa, pero no afectan la intensidad del gasto en I&D lo que refleja un efecto expulsión sobre los fondos privados de ambos instrumentos. Por otro lado, las firmas que reciben simultáneamente subsidios e incentivos tributarios para I&D tienen menor porcentaje de ventas innovativas. Además, no se detecta un impacto significativo de los subsidios y/o incentivos tributarios sobre los derechos de propiedad intelectual solicitados por las firmas.

Así, se concluye que ambos instrumentos no han sido efectivos para incentivar los outputs innovativos en las firmas chilenas.

The study explores the role of accounting technologies of government (ATGs) associated with UK Tax Credits and their impact on claimants' motivations, behaviour and identities. The aim of this study is to deepen empirical and conceptual understandings of how ATGs of tax authorities transform claimants into “entrepreneurs of the self”.

The authors approach Tax Credits (TC) as a case study to examine how ATGs articulate and operationalise neoliberal ideology through a complex network of inscription devices, expertise and locales. They adopt an ethnographic approach based on interviews, archival data and field notes to gain a deep understanding of citizens' lived experiences of ATGs when claiming Tax Credits.

The authors find that ATGs play a key role in transforming TC claimants into self-disciplined “citizen-subjects” whose decisions are informed by market logic. When claiming TC, citizens interact with ATGs and are transformed into “entrepreneurs of the self” who internalise neoliberal ideology and associated beliefs and assumptions of poverty, work and the welfare state. In this process of subjectification, ATGs (re)construct their identities from welfare recipients to “responsible” and “accountable” hardworking individuals and families. However, ATGs perversely disempower claimants who lack the required human capital for becoming responsible for their own welfare, and thus ultimately maintain socio-economic inequality.

Participants were drawn from a relatively narrow geographic area.

The authors reveal how accounting as a technology of government (dis)empowers individuals vis-à-vis the state and spurs inequality dependent on personal circumstances and calculative skills.

The authors contribute to the accounting literature by showing how neoliberal ideology is articulated, operationalised and reinforced by dynamic and repetitive interactions with ATGs of the UK TC scheme. The study helps deepen the understanding of the processes through which socially and economically disadvantaged individuals are transformed into self-governing economic agents responsible for their own welfare.