Tax Sensitivity and Home State Preferences in Internet Purchasing
نویسندگان
چکیده
The recent growth of Internet retail (e-retail) has attracted a great deal of attention in the academic literature and popular press. The future of e-retail is of interest for intellectual and practical reasons. Intellectually, e-retail provides nice opportunities to examine consumer and firm behavior. Practically, e-retail could have significant effects on the economy. It has grown steadily at about 25 percent per year since the collapse of the dot-com “bubble.” And even a small e-retail industry could have a substantial impact on traditional retail, which employs as many Americans as all manufacturing industries combined. In this paper, we investigate aspects of consumer behavior that will have a substantial impact on the future of Internet and traditional retail. We focus on two main issues. First, we examine the extent to which the success of e-retail is due to the de facto tax-free status of most e-retail purchases in the United States. This bears
منابع مشابه
Sales Taxes and Internet Commerce<xref ref-type="fn" rid="f1" ptype="faer10411" citart="citart1"><sup></sup></xref>
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...
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