òòò½Íø Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Sales Taxes and Internet Commerce
òòò½Íø Review
(pp. 1–26)
Abstract
We estimate the sensitivity of Internet retail purchasing to sales taxes using eBay data. Our first approach exploits the fact that a seller's location—and therefore the applicable tax rate—is revealed only after a buyer has expressed interest in an item. We document how adverse tax "surprises" reduce the likelihood of purchase and shift subsequent purchases toward out-of-state sellers. We then use more aggregated data to estimate that every one percentage point increase in a state's sales tax increases online purchases by state residents by almost 2 percent, while decreasing their online purchases from state retailers by 3–4 percent.Citation
Einav, Liran, Dan Knoepfle, Jonathan Levin, and Neel Sundaresan. 2014. "Sales Taxes and Internet Commerce." òòò½Íø Review 104 (1): 1–26. DOI: 10.1257/aer.104.1.1Additional Materials
JEL Classification
- H71 State and Local Taxation, Subsidies, and Revenue
- L81 Retail and Wholesale Trade; e-Commerce
- L86 Information and Internet Services; Computer Software