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Local sales tax adoption in U.S. counties: Internal and external forces

Jongmin Shon (School of Public Affairs and Administration, Rutgers University - Newark)
Yilin Hou (Public Administration and International Affairs and a Tenth Decade Faculty Scholar, Maxwell School of Citizenship and Public Affairs, Syracuse University)

Journal of Public Budgeting, Accounting & Financial Management

ISSN: 1096-3367

Article publication date: 1 March 2017

44

Abstract

This study aims to explore the underlying patterns in tax innovation. Prior studies of local sales taxes still leave a gap in the literature and render the results inconclusive because the studies cover either state level or localities within a single state for a short period. To cover the gap, we assemble a dataset of counties in all states for FY1970-2006 but focus on 12 states not threatened by intra-jurisdictional competition. Our empirical analyses yield evidence that a county adopts local sales tax for political and economic rationale rather than fiscal condition. Accordingly, regional diffusion has positive effects on local sales tax adoption in a county. These findings contribute substantively to sales tax literature while confirming policy diffusion.

Citation

Shon, J. and Hou, Y. (2017), "Local sales tax adoption in U.S. counties: Internal and external forces", Journal of Public Budgeting, Accounting & Financial Management, Vol. 29 No. 3, pp. 289-318. https://doi.org/10.1108/JPBAFM-29-03-2017-B001

Publisher

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Emerald Publishing Limited

Copyright © 2017 by PrAcademics Press

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