IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Cross-border Shopping and State Use Tax Liabilities: Evidence from eBay Transactions

Listed author(s):
  • James Alm


    (Department of Economics, Tulane University)

  • Mikhail I. Melnik


    (Department of Business Administration, School of Engineering Technology and Management, Southern Polytechnic State University)

Online commerce presents consumers with a convenient way of shopping outside of their local jurisdiction, and this online purchase decision is capable of affecting in significant ways the sales and use tax collections of state governments. However, the actual revenue impact has proven difficult to estimate. There is considerable work that examines the revenue impact of seller compliance with sales taxes. However, there is little work on buyer compliance with use taxes. In this paper we investigate the potential impact of cross-border shopping on state use tax liabilities of buyers, using data from the largest online consumer-to-consumer and business-to-consumer marketplace, We collect our own data on actual cross-border shopping transactions from eBay, focusing upon a "representative" commodity classification and a "typical" day; these data consist of nearly twenty-one thousand eBay listings generated by roughly seven thousand individual sellers with over nine thousand buyers. These data allow us to examine the extent of actual, not estimated, cross-border shopping by buyers, and the subsequent potential impact of this cross-border shopping on state use tax liabilities. Our results indicate that cross-border shopping is highly prevalent on eBay, with out-of-state purchases accounting for on average 94 percent of the volume of a state's purchase transactions. Even so, given the limited volume of eBay-based transactions relative to total sales transactions, the likely impact of cross-border transactions on state use tax revenue streams is quite low, at least at present, typically less than one percent of actual state sales tax revenues.

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:
File Function: First Version, 2012
Download Restriction: no

Paper provided by Tulane University, Department of Economics in its series Working Papers with number 1205.

in new window

Length: 32 pages
Date of creation: Jul 2012
Handle: RePEc:tul:wpaper:1205
Contact details of provider: Postal:
206 Tilton Hall, New Orleans, LA 70118

Phone: (504) 865-5321
Fax: (504) 865-5869
Web page:

More information through EDIRC

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:tul:wpaper:1205. 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: (Rodrigo Aranda Balcazar)

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.