Remittance Rules and the Distribution of Local Tax Revenue: Evidence after Wayfair

David Agrawal and Iuliia Shybalkina

No 11252, CESifo Working Paper Series from CESifo

Abstract: Requiring firms, rather than individuals, to remit sales taxes improves tax compliance. In the U.S., this shift toward firm-based remittance rules for remote purchases occurred gradually after South Dakota v. Wayfair. Using comprehensive and high-frequency local sales tax revenue data, we show that due to the increased compliance after Wayfair, revenues increased in the average locality by 5.4% and subsequently increased 5.1% after states required platforms to pay taxes on behalf of marketplace vendors. Critically, these effects are mainly a result of substantial increases in small towns and counties, with much smaller effects in larger jurisdictions. Increases in tax compliance thus influence both the level of tax revenues as well as its distribution across places.

Keywords: sales tax; online shopping; e-commerce; remittance rules; tax revenue; compliance (search for similar items in EconPapers)
JEL-codes: H25 H71 L81 R51 (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-pbe, nep-pub and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp11252.pdf (application/pdf)

Related works:
Journal Article: Remittance Rules and the Distribution of Local Tax Revenue: Evidence after Wayfair (2024)
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: https://EconPapers.repec.org/RePEc:ces:ceswps:_11252

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().