State borders create a discontinuous tax treatment of retail sales. In a Nash game, local tax rates will be higher on the low state tax side of a border. Local taxes will decrease from the nearest high-tax border and increase from the low-tax border. Using driving time from state borders and all...

This paper studies comprehensive national panel data of local option sales taxes at the monthly frequency. I calculate state-by-month population weighted averages and standard deviations of local sales tax rates. I document ten stylized facts concerning the time series patterns and spatial...

State borders create a discontinuous tax treatment of retail sales. In a Nash game, local tax rates will be higher on the low-state-tax side of a border. Local taxes will decrease from the nearest high-tax border and increase from the low-tax border. Using driving time from state borders and all...

Using the example of geographic borders, I demonstrate how the permeability of lines in the tax system and the ability of the tax authority to reduce tax evasion across lines are essential determinants of the optimal commodity tax policy.