Technology Diffusion in Tax: An Examination of Tax Analytics and Automation Routinization

Abstract

This study examines the use of tax analytics and automation (TAA) technologies in corporate tax departments. We investigate the factors that influence the degree to which TAA technologies are used as an integral part of the tax department’s processes. A survey of tax professionals from Fortune 1000 companies was conducted to gain an understanding of the level of TAA routinization that exists in their corporate tax departments. This study extends the research literature on assimilation of innovative technologies by using a unique sample in a tax department setting. We adapt a technology diffusion model from Zhu, Kraemer and Xu (2006) and predict that factors related to technological, organizational and environmental contexts are related to the degree of routinization of TAA technologies. Results indicate that the context factors of technology integration, managerial obstacles, and regulatory environment are all related to the level of TAA technology used by corporate tax departments

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