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The Impact of the Amazon Tax on Local Sales Tax Revenue in Urban and Rural Jurisdictions
Author(s) -
Afonso Whitney B.
Publication year - 2019
Publication title -
public budgeting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.694
H-Index - 30
eISSN - 1540-5850
pISSN - 0275-1100
DOI - 10.1111/pbaf.12215
Subject(s) - sales tax , amazon rainforest , revenue , business , tax revenue , ad valorem tax , tax reform , value added tax , tax credit , use tax , public economics , finance , economics , ecology , biology
E‐commerce has become an integral part of Americans’ lives and while it offers many benefits, it also represents forgone sales tax revenue for governments. Using a difference‐in‐differences model, this analysis examines how the Amazon tax affected local sales tax collections in North Carolina and whether that impact has been greater for urban, rural, or tourism‐rich counties. The results suggest that the Amazon tax increased revenues and urban jurisdictions benefit most. This finding is important for practitioners and policymakers as they consider the impact of policy changes, such as the South Dakota v. Wayfair ruling, on revenue capacity and financial management.