Brian Baugh, Itzhak Ben-David, Hoonsuk Park, 05 May 2014

Several US states have recently implemented laws requiring the collection of sales tax on online purchases. In practice, however, only Amazon.com has been affected. This column shows that households living in these states have reduced their Amazon expenditures by 9.5%. It also shows that the decline in Amazon purchases is offset by a 2% increase in purchases at local brick-and-mortar retailers and a 19.8% increase in purchases through the online operations of competing retailers.

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