Hostname: page-component-78c5997874-g7gxr Total loading time: 0 Render date: 2024-11-09T09:13:01.915Z Has data issue: false hasContentIssue false
  • English
  • Français

Explaining State Internet Sales Taxation: New Economy, Old-Fashioned Interest Group Politics

Published online by Cambridge University Press:  25 January 2021

Samuel J. Best  and
Paul Teske
Samuel J. Best
Affiliation:
University of Connecticut
Paul Teske
Affiliation:
SUNY Stony Brook
Get access Rights & Permissions [Opens in a new window]

Abstract

Retail sales on the Internet are growing at a rapid pace. Some states have tapped into this potential revenue source with Internet sales taxes, while others have not. What are the factors that lead states to make these policy decisions? Using a 50-state comparative research design, we find that interest groups, as much as the partisan and economic factors emphasized in previous research on state tax policy, are correlated with adoptions of these state tax innovations. Furthermore, this interest group influence is not limited to a single industry, but comes from self-interested groups representing both sides of the issue, including newly emerging technology interests.

Type
Research Article
Information
State Politics & Policy Quarterly , Volume 2 , Issue 1 , Spring 2002 , pp. 37 - 51
Copyright
Copyright © Board of Trustees of the University of Illinois, 2002

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Advisory Commission on Electronic Commerce. 2000. Report to Congress. April 20. Available at:http://www.ecommercecommission.org/acec_report.pdf.Google Scholar
Berry, Frances Stokes, and Berry, William. 1992. “Tax Innovation in the States: Capitalizing on Political Opportunity.” American Journal of Political Science 36:715–742.CrossRefGoogle Scholar
Berry, William, Ringquist, Evan, Fording, Richard, and Hanson, Russell. 1998. “Measuring Citizen and Government Ideology in the American States, 1960-1993.” American Journal of Political Science 42:327–348.CrossRefGoogle Scholar
Brace, Paul. 1993. State Government and Economic Performance. Baltimore, MD: Johns Hopkins Press.Google Scholar
Bruce, Donald, and Fox, William. 2000. “E-Commerce in the Context of Declining State Sales Tax Bases.” National Tax Journal 53:572–579.CrossRefGoogle Scholar
Quarterly, Congressional. 1999. “Digital Commerce: The Issues.” CQ Outlook, February 20, p. 14.Google Scholar
Due, John, and Mikesell, John. 1994. Sales Taxation: State and Local Structure and Administration. Washington, DC: Urban Institute Press.Google Scholar
Dye, Thomas, and Feiock, Richard. 1995. “State Income Tax Adoption and Economic Growth.” Social Science Quarterly 76:648–654.Google Scholar
Coalition, E-Freedom. 1999. Proposal to the Advisory Commission on Electronic Commerce. November 10. Available at:http://www.e-freedom.org.Google Scholar
Garand, James. 1988. “Explaining Government Growth in the U.S. States.” American Political Science Review 82:837–849.CrossRefGoogle Scholar
Goolsbee, Austin. 2000. “In a World without Borders: The Impact of Taxes on Internet Commerce.” Quarterly Journal of Economics 115:561–576.CrossRefGoogle Scholar
Goolsbee, Austin, and Zittrain, Jonathan. 1999. “Evaluating the Costs and Benefits of Taxing Internet Commerce.” National Tax Journal 52:413–428.Google Scholar
Gray, Virginia, and Lowery, David. 1996. The Population Ecology of Interest Representation: Lobbying Communities in the American States. Ann Arbor, MI: University of Michigan Press.CrossRefGoogle Scholar
Grimes, Ann. 2000. “Silicon Valley Moguls Pour Money into Ballot Battles over Education,” Wall Street Journal, October 31, p. B1.Google Scholar
Hansen, Susan. 1983. The Politics of Taxation: Revenue without Representation. New York: Praeger.Google Scholar
Hansen, Susan. 1990. “State Taxation and Budgets.” In Politics in the American States, eds. Gray, Virginia, Jacob, Herbert, and Albritton, Robert. 5th ed. Boston, MA: Little Brown.Google Scholar
Hunter, Lawrence A., and Pieler, George. 2000. “[email protected]. A Report for the Institute for Policy Innovation.” March 20. Available at:http://www.ipi.org/ipi/IPIPublications.nsf/PublicationLookupFullText/7652FF4968C0EAD8862568A40070D07C.Google Scholar
Kone, Susan, and Winters, Richard. 1993. “Taxes and Voting: Electoral Retribution in the American States.” Journal of Politics 55:22–40.CrossRefGoogle Scholar
Maguire, Steven. 2000. RL30431: Internet Transactions and the Sales Tax. Washington, DC: Congressional Research Service.Google Scholar
Mazerov, Michael, and Lav, Iris. 1998. A Federal “Moratorium” on Internet Commerce Taxes Would Erode State and Local Revenues and Shift Burdens to Lower-Income Households. May 11. A report for the Center on Budget and Policy Priorities. Available at:http://www.cbpp.org/512webtax.htm.Google Scholar
Melloan, George. 2001. “Whatever Happened to the Labor Movement?” Wall Street Journal, September 4, p. B1.Google Scholar
Mikesell, John. 1999. “The American Retail Sales Tax: Consideration of their Structure, Operations, and Potential as a Foundation for a Federal Sales Tax.” In Tax Policy in the Real World, ed. Slemrod, Joel. Cambridge: Cambridge University Press.Google Scholar
National Governors Association. 2001. “Open Letter to U.S. Congress.” August 8. Available at:http://www.nga.org/nga/legislativeUpdate/1,1169,C_LETTER^D_2466,00.html.Google Scholar
Nesbary, Dale. 2000. “The Taxation of Internet Commerce.” Social Science Computer Review 18:17–39.CrossRefGoogle Scholar
Newman, Nathan. 1995. Prop 13 Meets the Internet: How State and Local Government Finances Are Becoming Road Kill on the Information Superhighway. Berkeley, CA: Center for Community Economic Research.Google Scholar
Niemi, Richard, Stanley, Harold, and Vogel, Ronald. 1995. “State Economies and State Taxes: Do Voters Hold Governors Accountable?” American Journal of Political Science 39:936–957.CrossRefGoogle Scholar
Powell, David. 2000. “Internet Taxation and U.S. Intergovernmental Relations: From Quill to the Present.” Publius: The Journal of Federalism 30:39–51.CrossRefGoogle Scholar
Radcliff, Benjamin, and Saiz, Martin. 1998. “Labor Organization and Public Policy in the American States.” Journal of Politics 60:113–125.CrossRefGoogle Scholar
Schattschneider, E. E. 1960. The Semisovereign People. New York: Holt, Rinehard and Winston.Google Scholar
Stigler, George. 1971. “The Theory of Economic Regulation.” Bell Journal of Economics and Management Science 2:3–21.CrossRefGoogle Scholar
Tannenwald, Robert. 1998. “Come the Devolution, Will States Be Able to Respond?” New England Economic Review 10:53–73.Google Scholar
Thomas, Clive, and Hrebner, Ronald J.. 1996. “Interest Groups in the States.” In Politics in the American States, eds. Gray, Virginia and Jacob, Herbert. 6th ed. Washington, DC: CQ Press.Google Scholar
United States Census Bureau. 2001. E-Stats Report. August 15. Available at:http://www.census.gov/estats.Google Scholar
United States Government Accounting Office. 2000. Sales Taxes - Electronic Commerce Growth Presents Challenges; Revenue Losses Are Uncertain. June. GAO/GGD/OCE-00-165.Google Scholar
Whinston, Andrew, Barua, Anitesh, Shutter, Jay, Wilson, Brant, and Pinnell, Jon. 2001. Measuring the Internet Economy. A Report for the University of Texas' Center for Research in Electronic Commerce. January. Available at:http://www.internetindicators.com/jan_2001.pdf.Google Scholar
Wiggins, Charles, Hamm, Keith, and Bell, Charles. 1994. “Interest Group and Party Influence Agents in the Legislative Process: A Comparative State Analysis.” Journal of Politics 54:82–100.CrossRefGoogle Scholar
Zook, Mathew. 2000. “The Web of Production: The Economic Geography of Commercial Internet Content Production in the United States.” Environment and PlanningCrossRefGoogle Scholar