Levin, E.J., and Wright, R.E. (2004) Regional taxation and retailing: the economic geography of the internet. International Review of Retail, Distribution and Consumer Research, 14, pp. 337-356. (doi: 10.1080/09593960420001678390)
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Abstract
It is well established in the economics literature that before-tax prices are not independent of sales-tax rates. This paper shows that a sales-tax imposed in a high tax region can decrease the tax-included price for a buyer in a low tax region who purchases from a seller in the high tax region. Therefore, it may be more profitable for Internet retailers to be located in high tax regions. An empirical analysis shows that automobile manufacturers in the European Union (EU) set higher before-tax recommended prices for countries with low indirect taxes. This may contribute to the explanation of the flow of Internet automobile sales from high tax countries to low tax countries in the EU.
| Item Type: | Articles |
|---|---|
| Status: | Published |
| Refereed: | Yes |
| Glasgow Author(s) Enlighten ID: | Levin, Dr Eric and Wright, Dr Robert |
| Authors: | Levin, E.J.,, and Wright, R.E. |
| College/School: | College of Social Sciences > School of Social and Political Sciences > Urban Studies |
| Journal Name: | International Review of Retail, Distribution and Consumer Research |
| ISSN: | 0959-3969 |
| Published Online: | 17 February 2007 |
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