Can Taxes Shape an Industry? Evidence from the Implementation of the “Amazon Tax”

Abstract

For years, online retailers have maintained a price advantage over brick‐and‐mortar retailers by not collecting sales tax at the time of sale. Recently, several states have required that online retailer Amazon collect sales tax during checkout. Using transaction‐level data, we document that households living in these states reduced their Amazon purchases by 9.4% following the implementation of the sales tax laws, implying elasticities of –1.2 to –1.4. The effect is stronger for large purchases, where purchases declined by 29.1%, corresponding to an elasticity of –3.9. Studying competitors in the electronics field, we find some evidence of substitution toward competing retailers.

Inferring Tax Compliance from Pass-Through: Evidence from Airbnb Tax Enforcement Agreements

“…4 Many states passed laws, collectively referred to as the "Amazon tax," enabling them to cite the presence of facilities such as fulfillment centers to establish nexus (Baugh et al, 2018).…”

Asymmetric Consumption Smoothing

“…Relative to U.S. Census, households in our sample are well dispersed geographically, though we have high concentrations of households in California, New York, and Texas. See a detailed distribution of the sample inBaugh, Ben-David, and Park (2018), who use the same broad sample.17 2013 Current Population Survey from the U.S. Census (HINC01).…”

A World Without Borders Revisited: The Impact of Online Sales Tax Collection on Shopping and Search

“…Second, their analysis aggregates the data to the county-year level, while I aggregate the data to the household-month level.I get nearly identical estimates if I aggregate to the county-year level and limit my sample to 2006-2013. My estimate also differs fromBaugh, Ben-David, and Park (2018) likely because of differences in the underlying data. First, my analysis spans 2006-2016 compared to 2011-2015, which adds an additional six states to my analysis.6 Restricting my analysis to 2011-2015 generates a slightly smaller elasticity of −1.66, but this is still higher than the −1.2 to −1.4 estimated in Baugh,…”

“…Recent work leverages detailed online shopping data, but often is limited to particular websites, product categories, or states (Einav et al, 2014;Anderson et al, 2010;Ellison and Ellison, 2009;Hu and Tang, 2014). My paper extends the work of Baugh, Ben-David, and Park (2018) and Houde, Newberry, and Seim (2017) by incorporating data on browsing and total household expenditures to present a fuller picture of how household shopping behavior changes in response to Amazon's sales tax collection. 2017-2 to -30 Davis 2011-2.2 to -3.6 Agarwal et al 2017-2.3 Mikesell (1970) -6.3…”