Stan Veliotis investigates corporate tax avoidance for Nevada firms in light of that state's pro-officer liability laws
Stan Veliotis and co-authors have a forthcoming paper in Journal of Business Finance and Accounting. The article is titled, “Director and Officer Liability and Corporate Tax Avoidance.” They use the unique nature of the director and officer liability protection law applicable to Nevada-incorporated firms to study how liability protection is related to corporate tax avoidance. They find that Nevada firms avoid 32 percent more federal corporate tax than Delaware firms, and 40 percent more than firms incorporated in other states. Nevada firms also have a 15 percent lower cash effective tax rate and an 8 percent lower GAAP ETR. Greater tax avoidance is also associated with lower payouts to shareholders for Nevada firms.