State Tax Haven Legislation and Corporate Income Tax Revenues

Stephen J. Lusch, James Stekelberg

Research output: Contribution to journalArticlepeer-review


In response to the rise of foreign tax haven usage by multinational corporations, several US states have enacted laws that require income from affiliated entities operating in tax haven jurisdictions to be included on the firm’s state income tax return. We examine the revenue effects of this legislation. Employing a variety of alternative empirical approaches including a difference-in-differences specification, state and year fixed effects regressions, and a synthetic control methodology, our results provide consistent evidence of a positive association between the enactment of tax haven legislation and state corporate income tax revenues in all enacting states except West Virginia. Our study contributes to the state tax policy literature and the literature on tax havens. Moreover, given that states continue to consider implementing, changing, or repealing tax haven legislation, our results inform this current policy debate.

Original languageEnglish (US)
Pages (from-to)354-383
Number of pages30
JournalPublic Finance Review
Issue number3
StatePublished - May 1 2020
Externally publishedYes


  • state corporate income tax
  • state corporate income tax revenue
  • state tax haven legislation
  • tax havens

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics
  • Public Administration


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