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LOST and Found in Walmart: Walmart's Effect on Local Option Sales Tax (LOSTs) Adoption and Sales Tax Revenue

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  • Matt Young

Abstract

Throughout the period of adoption of Local Option Sales Taxes (LOSTs) by local governments research has found many causes and associations for adoption and utilization of LOSTs. This research explores the impact that the rise of Large Supply Chain retailers, which expanded along much the same timeline as LOSTs, had on the adoption of LOSTs and collection of sales tax revenue. Leveraging LOST adoption along different timelines in three states and hundreds of Walmart openings, a Cox Proportional Hazard Model is used to estimate the impact a Walmart opening has on time to adoption of LOST at the county level. A Difference in Difference with multiple validity and robustness checks is used to estimate the impact on sales tax collection. Results indicate that a Walmart opening has a large impact on the hazard ratio—indicating it speeds time to adoption. Unsurprisingly, this leads to larger sales tax revenue collections by host jurisdictions.

Suggested Citation

  • Matt Young, 2025. "LOST and Found in Walmart: Walmart's Effect on Local Option Sales Tax (LOSTs) Adoption and Sales Tax Revenue," Public Finance Review, , vol. 53(3), pages 340-370, May.
    • Handle: RePEc:sae:pubfin:v:53:y:2025:i:3:p:340-370
    DOI: 10.1177/10911421241289974
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    References listed on IDEAS

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    1. Luna, LeAnn & Bruce, Donald J. & Hawkins, Richard R., 2007. "Maxing Out: An Analysis of Local Option Sales Tax Rate Increases," National Tax Journal, National Tax Association;National Tax Journal, vol. 60(1), pages 45-63, March.
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    3. Artz, Georgeanne M. & Stone, Kenneth E., 2003. "An Analysis Of The Transfer Of Funds From Weak Retail Counties To Strong Retail Counties In Iowa Via Local Option Sales Taxes," 2003 Annual meeting, July 27-30, Montreal, Canada 21979, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. John D. Wong, 1996. "The Impact Of Local Option Sales Taxes On Retail Sales, Employment, Payrolls, And Establishments: The Case For Kansas," The Review of Regional Studies, Southern Regional Science Association, vol. 26(2), pages 166-176, Fall.
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