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

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  • Bruce, Donald
  • Fox, William F.

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.

Suggested Citation

  • Bruce, Donald & Fox, William F., 2000. "E-Commerce in the Context of Declining State Sales Tax Bases," National Tax Journal, National Tax Association;National Tax Journal, vol. 53(4), pages 1373-1390, December.
    • Handle: RePEc:ntj:journl:v:53:y:2000:i:4:p:1373-90
    DOI: 10.17310/ntj.2000.4S2.06
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    References listed on IDEAS

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    1. Goolsbee, Austan & Zittrain, Jonathan, 1999. "Evaluating the Costs and Benefits of Taxing Internet Commerce," National Tax Journal, National Tax Association;National Tax Journal, vol. 52(3), pages 413-428, September.
    2. Austan Goolsbee, 2000. "In a World Without Borders: The Impact of Taxes on Internet Commerce," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(2), pages 561-576.
    3. Fox, William F. & Murray, Matthew N., 1997. "The Sales Tax and Electronic Commerce: So What's New?," National Tax Journal, National Tax Association, vol. 50(3), pages 573-92, September.
    4. Fox, William F. & Murray, Matthew N., 1997. "The Sales Tax and Electronic Commerce: So What's New?," National Tax Journal, National Tax Association;National Tax Journal, vol. 50(3), pages 573-592, September.
    5. Ring, Raymond J. Jr., 1999. "Consumers’ Share and Producers’ Share of the General Sales Tax," National Tax Journal, National Tax Association, vol. 52(n. 1), pages 79-90, March.
    6. Goolsbee, Austan & Zittrain, Jonathan, 1999. "Evaluating the Costs and Benefits of Taxing Internet Commerce," National Tax Journal, National Tax Association, vol. 52(n. 3), pages 413-28, September.
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