E-Commerce in the Context of Declining State Sales Tax Bases

Donald Bruce and William Fox

National Tax Journal, 2000, vol. 53, issue 4, 1373-90

Abstract: This paper extends the quantitative estimates of sales tax revenue losses from electronic commerce in a variety of ways. First, we place the effects of e-commerce in the context of general sales tax base trends, arguing that e-commerce is only one of the factors reducing sales tax bases. Second, we take a forward looking view, estimating both the current losses and the expected losses several years hence. Third, we estimate the revenue-neutral increases in state sales tax rates that will become necessary to offset the base declines. Revenue loss estimates are prepared for every state with a sales tax. Our baseline estimates suggest that e-commerce will cause about $10.8 billion in additional tax revenue losses nationwide in 2003.

Date: 2000
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Persistent link: https://EconPapers.repec.org/RePEc:ntj:journl:v:53:y:2000:i:4:p:1373-90

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