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Logics behind evading overnight taxes: a configurational analysis

Logics behind evading overnight taxes: a configurational analysis Overnight taxes are controversial. They affect tourists’ consumption behavior and hotels’ profits. This potentially generates undesirable industry practices such as underreporting overnights to evade overnight taxes. The aim of the paper is to understand the conditions and outcomes of underreporting. This is important because underreporting affects destinations’ tax income, which in turn may have further effects on tourism or other public services.Design/methodology/approachThis study uses qualitative comparative analysis to identify what specific combinations of conditions motivate managers of hospitality businesses to evade overnight taxes.FindingsWhile potential economic gain seems to be the obvious answer, this study finds that different configurations of causal conditions account for non-compliance. Four different configurations combining six conditions explain the logics behind hotel overnight tax evasion behavior. The conditions refer to both utilitarian affordances and the individual tax morale of hospitality managers. Certain utilitarian conditions in combination can overrule moral objections to non-compliance.Originality/valueThe study provides a nuanced understanding of overnight tax evasion motives and suggests how to connect work on tourism taxes with destination governance issues and destination management organization funding. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Contemporary Hospitality Management Emerald Publishing

Logics behind evading overnight taxes: a configurational analysis

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
0959-6119
DOI
10.1108/ijchm-05-2019-0421
Publisher site
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Abstract

Overnight taxes are controversial. They affect tourists’ consumption behavior and hotels’ profits. This potentially generates undesirable industry practices such as underreporting overnights to evade overnight taxes. The aim of the paper is to understand the conditions and outcomes of underreporting. This is important because underreporting affects destinations’ tax income, which in turn may have further effects on tourism or other public services.Design/methodology/approachThis study uses qualitative comparative analysis to identify what specific combinations of conditions motivate managers of hospitality businesses to evade overnight taxes.FindingsWhile potential economic gain seems to be the obvious answer, this study finds that different configurations of causal conditions account for non-compliance. Four different configurations combining six conditions explain the logics behind hotel overnight tax evasion behavior. The conditions refer to both utilitarian affordances and the individual tax morale of hospitality managers. Certain utilitarian conditions in combination can overrule moral objections to non-compliance.Originality/valueThe study provides a nuanced understanding of overnight tax evasion motives and suggests how to connect work on tourism taxes with destination governance issues and destination management organization funding.

Journal

International Journal of Contemporary Hospitality Management – Emerald Publishing

Published: Feb 10, 2020

Keywords: Tax evasion; Hotel; QCA; DMO; Tax morale; Overnight taxes

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