Statutory incidence and sales tax compliance: Evidence from Wayfair

William Fox, Enda Hargaden and LeAnn Luna

Journal of Public Economics, 2022, vol. 213, issue C

Abstract: This paper studies the compliance, pricing, and progressivity effects of changing statutory incidence. The Wayfair Supreme Court decision granted U.S. states new authority to shift the statutory incidence of taxation from consumers to online and out-of-state retailers, forcing supply-side remittance of the sales tax. With state-level data, we find this increased sales tax revenues by 7.9 percent, concentrated in states with stringent compliance standards. With barcode-level scanner data, we find evidence of full pass-through of the tax to consumers. Effects are progressive however, with the reforms increasing tax liabilities principally for higher-income households.

Keywords: Sales tax; Compliance; State and local public finance; Statutory incidence (search for similar items in EconPapers)
JEL-codes: H21 H22 H25 H26 H71 H73 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:213:y:2022:i:c:s0047272722001189

DOI: 10.1016/j.jpubeco.2022.104716

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