IDEAS home Printed from
MyIDEAS: Login to save this article or follow this journal

Competition over the Tax Base in the State Sales Tax

  • Jason M. Fletcher

    (University of Wisconsin-Madison)

  • Matthew N. Murray

    (University of Tennessee, Knoxville)

The sales tax shows wide variation across states. Rates differ, some states allow local options, and the base can vary dramatically. Consumer items like food are often afforded preferential treatment, and business purchases like manufacturing machinery are exempt in some states. There is no research that explores these and other sales tax base choices. This article provides an empirical examination of sales tax base choice on the part of states using a political economy framework and tools of spatial econometrics. The analysis accommodates tax competition among states, using a variety of alternative definitions of “competitors.†The authors find little evidence that consumer exemptions are linked to needy segments of the population, while equipment exemptions are more common in states with large industrial sectors. The results also show that the nature of the interstate tax competition process differs for different elements of the base and that nongeographic competition can be especially important.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Article provided by in its journal Public Finance Review.

Volume (Year): 34 (2006)
Issue (Month): 3 (May)
Pages: 258-281

in new window

Handle: RePEc:sae:pubfin:v:34:y:2006:i:3:p:258-281
Contact details of provider:

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:sae:pubfin:v:34:y:2006:i:3:p:258-281. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (SAGE Publications)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.