The Revenue Impacts of Cross-border Sales and Tourism: Wine and Liquor Taxation

As tax rates have risen through time, voter dislike of increased taxation has strengthened, leaving some states in a budget crunch. If policy-makers are to keep pace with the growing demand for public services, they must find ways to export tax burdens outside of the district. Taking advantage of cross-border shopping and tourism are two such ways to export tax burdens. This paper attempts to measure the revenue impacts of cross-border shopping and tourist purchases of wine and liquor in West Virginia. I find that cross-border shopping and tourism exert significant impacts on tax revenues from wine and liquor sales.