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Do Ebay Sellers Comply With State Sales Taxes?

Author

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  • Alm, James
  • Melnik, Mikhail I.

Abstract

The rapid growth in online commerce has eroded state sales tax bases. However, the extent of this reduction is difficult to estimate. In this paper we collect our own data from eBay.com on a “representative” commodity classification and a “typical” day. Our data consist of nearly 21,000 eBay listings generated by roughly 7,000 individual sellers with 9,300 buyers. We find that overall eBay seller compliance is quite low, but that compliance by established sellers is significantly higher. Given that established sellers account for the bulk of online commerce, the estimated revenue loss from eBay seller noncompliance may be relatively small.

Suggested Citation

  • Alm, James & Melnik, Mikhail I., 2010. "Do Ebay Sellers Comply With State Sales Taxes?," National Tax Journal, National Tax Association;National Tax Journal, vol. 63(2), pages 215-236, June.
    • Handle: RePEc:ntj:journl:v:63:y:2010:i:2:p:215-36
    DOI: 10.17310/ntj.2010.2.02
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    References listed on IDEAS

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    1. Bruce, Donald & Fox, William F., 2000. "E-Commerce in the Context of Declining State Sales Tax Bases," National Tax Journal, National Tax Association, vol. 53(n. 4), pages 1373-90, December.
    2. Garrett, Thomas A. & Marsh, Thomas L., 2002. "The revenue impacts of cross-border lottery shopping in the presence of spatial autocorrelation," Regional Science and Urban Economics, Elsevier, vol. 32(4), pages 501-519, July.
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    5. Ferris, J. Stephen, 2000. "The Determinants of Cross Border Shopping: Implications for Tax Revenues and Institutional Change," National Tax Journal, National Tax Association;National Tax Journal, vol. 53(4), pages 801-824, December.
    6. James Alm & Mikhail I. Melnik, 2005. "Sales Taxes and the Decision to Purchase Online," Public Finance Review, , vol. 33(2), pages 184-212, March.
    7. Goolsbee, Austan & Zittrain, Jonathan, 1999. "Evaluating the Costs and Benefits of Taxing Internet Commerce," National Tax Journal, National Tax Association, vol. 52(n. 3), pages 413-28, September.
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    9. Fox, William F. & Luna, LeAnn & Murray, Matthew N., 2008. "The SSTP and Technology: Implications for the Future of the Sales Tax," National Tax Journal, National Tax Association;National Tax Journal, vol. 61(4), pages 823-841, December.
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    Citations

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    Cited by:

    1. James Alm, 2012. "Measuring, explaining, and controlling tax evasion: lessons from theory, experiments, and field studies," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 19(1), pages 54-77, February.
    2. James Alm & Mikhail I. Melnik, 2012. "Does Online Cross-border Shopping Affect State Use Tax Liabilities?," Working Papers 1206, Tulane University, Department of Economics.
    3. James Alm & Keith Finlay, 2013. "Who Benefits from Tax Evasion?," Economic Analysis and Policy, Elsevier, vol. 43(2), pages 139-154, September.
    4. Argilés-Bosch, Josep M. & Somoza, Antonio & Ravenda, Diego & García-Blandón, Josep, 2020. "An empirical examination of the influence of e-commerce on tax avoidance in Europe," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 41(C).
    5. James Alm & Kyle Borders, 2014. "Estimating the “Tax Gap” at the State Level: The Case of Georgia's Personal Income Tax," Public Budgeting & Finance, Wiley Blackwell, vol. 34(4), pages 61-79, December.
    6. James Alm, 2019. "What Motivates Tax Compliance?," Journal of Economic Surveys, Wiley Blackwell, vol. 33(2), pages 353-388, April.
    7. Annabelle Doerr & Sarah Necker, 2021. "Collaborative Tax Evasion in the Provision of Services to Consumers: A Field Experiment," American Economic Journal: Economic Policy, American Economic Association, vol. 13(4), pages 185-216, November.
    8. David R. Agrawal & William F. Fox, 2017. "Taxes in an e-commerce generation," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 24(5), pages 903-926, September.

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    More about this item

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue

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