Document Type



Taxation-Federal | Taxation-State and Local | Tax Law


This report examines the need for disclosure of state corporate income tax data in order to facilitate more thoughtful tax policymaking as well as accountability and openness in government. While disclosure of federal income tax data has been resolved by the SEC’s required disclosures of public corporations, the only states that have laws mandating disclosure of information relating to their state’s income tax are Arkansas, West Virginia, and Massachusetts.

Firm-specific disclosure of corporate tax information at the state level is necessary for informed tax policy, essential to public understanding of corporate tax reform issues, and will complement SEC mandated disclosures. Because of the large sums of money involved in corporate taxation, disclosure is necessary to analyze how the costs of government are distributed and which companies and industries bear the burden of the tax within each state. Public understanding is essential in order to affect economic reform in a democratic setting regardless of whether the policy is founded on sound theoretical reasoning and the public must know which corporations are receiving incentives in order to judge whether the benefits justify the foregone revenue. Firm-specific data, in particular, is necessary in order to get the benefits of disclosure. Compared with aggregate data, firm-specific information will allow tax policy judgements to be made that could not be made in the abstract, and will also facilitate inter and intra-industry comparisons.

Arguments against disclosure at the state level that firm-specific disclosure might reveal proprietary information, violate a corporation’s right to privacy, discourage filing of accurate tax returns, or even undercut a state’s business climate all fall short of rebutting the benefits that come from disclosure and are largely unremarkable arguments when viewed in comparison with the type of disclosure mandated by the SEC.