Published:
Cambridge, Mass: National Bureau of Economic Research, April 2014
Published in:NBER working paper series ; no. w20052
Extent:
1 Online-Ressource
Language:
English
DOI:
10.3386/w20052
Identifier:
Reproduction note:
Hardcopy version available to institutional subscribers
Origination:
Footnote:
Mode of access: World Wide Web
System requirements: Adobe [Acrobat] Reader required for PDF files
Description:
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 Amazon purchases by 9.4% after sales tax laws were implemented, implying elasticities ranging from -1.2 to -1.4. The effect is more pronounced for large purchases, for which we estimate a reduction of 29.1% in purchases, corresponding to an elasticity of -3.9. Studying competitors in the electronics field, we detect some evidence of substitution toward competing retailers