Technological advances have impacted the sales tax more than any other tax imposed in the U.S. Technology creates new problems and sales tax evasion and avoidance opportunities, but also may provide business and governments with the tools to solve them. We discuss how technological developments...

This paper provides an economic evaluation of the state corporate income tax (CIT) in an open economy environment characterized by highly mobile capital. We find little economic justification for the state CIT, but recognize that it is not likely to be replaced in the foreseeable future. The...

States’ ability to collect taxes on business, and particularly on interstate business activity, appears to be diminishing. This should not be a surprising outcome since economists have for many years recognized the difficulties for sub-national governments to collect taxes on mobile activities...

We examine why and when some local governments choose to reach a legal sales tax rate maximum while others do not. We employ a duration model to study Tennessee local option sales taxes between 1975 and 1999. Our results show that between 1975 and 1984, counties with lower sales tax capacity...

This study examines business organizational form decisions as a source of tax base mobility. We posit that organizational form responses to state tax policy allow for an indirect means of exploring mobility through business tax planning. Using state-level IRS data for the years 1997–2008, we...

States have independent taxing powers that create conflicts between tax autonomy and economic efficiency. Policymakers can minimize that tradeoff by developing effective working relationships between the federal and state governments and frameworks to guide tax policy decisions. However, little...

In the spirit of the elasticity of taxable income literature, which has primarily considered federal taxes using individual data, we estimate panel regressions of state personal income tax bases on state tax rates, structures, and other controls. We consider actual tax base data gathered...

Federal intervention in state taxation is normatively supportable when state tax policies generate negative externalities or result in excessive compliance burdens. States usually do not have sufficient incentive to cooperate to eliminate these distortions, and state cooperative cartels tend to...

Identifies and examines state policy issues to be addressed in the taxation of electronic commerce. Argues for destination-based taxes, congressional action on nexus, a direct use rule for business purchase exemptions, and similar taxation of functionally equivalent activities.

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,...