Does Online Cross-border Shopping Affect State Use Tax Liabilities?

James Alm () and Mikhail Ion Melnik ()

No 1206, Working Papers from Tulane University, Department of Economics

Abstract: How does online cross-border shopping affect state use tax liabilities? We collect our own data on actual online cross-border shopping transactions from eBay.com, focusing upon a "representative" commodity classification and a "typical" day. These data allow us to examine the extent of actual online cross-border shopping by buyers, and the subsequent potential impact on state use tax liabilities of buyers. Our results indicate that online cross-border shopping is highly prevalent on eBay, with out-of-state purchases accounting for on average 94 percent of the volume of a state's online purchase transactions. Even so, given the limited volume of eBay- based transactions relative to total sales transactions, the likely impact of cross-border transactions on state use tax revenue streams is negligible, even if we assume full buyer compliance with state use taxes.

Keywords: online commerce; sales taxes; nexus; tax evasion (search for similar items in EconPapers)
JEL-codes: H71 H73 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-iue, nep-pbe and nep-pub
Date: 2012-07
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://econ.tulane.edu/RePEc/pdf/tul1206.pdf First Version, 2012 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:tul:wpaper:1206

Access Statistics for this paper

More papers in Working Papers from Tulane University, Department of Economics
Contact information at EDIRC.
Series data maintained by Keith Finlay ().