Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/302737 
Year of Publication: 
2024
Series/Report no.: 
CESifo Working Paper No. 11252
Publisher: 
CESifo GmbH, Munich
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.
Subjects: 
sales tax
online shopping
e-commerce
remittance rules
tax revenue
compliance
JEL: 
H25
H71
L81
R51
Document Type: 
Working Paper
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