DOES USE TAX EVASION PROVIDE A COMPETITIVE ADVANTAGE TO E-TAILERS?
Many online retail firms (e-tailers) do not collect sales tax from the majority of their customers. This practice provides these firms with a potential competitive advantage over traditional retailers. We examine stock market returns and analysts' sales forecast revisions surrounding federal le...
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| Veröffentlicht in: | National tax journal 2016-03, Vol.69 (1), p.133-168 |
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| container_end_page | 168 |
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| container_title | National tax journal |
| container_volume | 69 |
| creator | Hoopes, Jeffrey L. Thornock, Jacob R. Williams, Braden M. |
| description | Many online retail firms (e-tailers) do not collect sales tax from the majority of their customers. This practice provides these firms with a potential competitive advantage over traditional retailers. We examine stock market returns and analysts' sales forecast revisions surrounding federal legislative proposals, such as the Marketplace Fairness Act, that could erode this alleged competitive advantage for e-tailers. Following events that indicated an increased likelihood of federal sales tax legislation, we find negative abnormal stock returns for e-tail firms relative to traditional retail firms. We also find that analysts forecast a future reduction in sales revenue for e-tailers. These findings imply the existence of a competitive advantage for e-tailers that will potentially diminish with the enactment of federal sales tax legislation. |
| doi_str_mv | 10.17310/ntj.2016.1.05 |
| format | Article |
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This practice provides these firms with a potential competitive advantage over traditional retailers. We examine stock market returns and analysts' sales forecast revisions surrounding federal legislative proposals, such as the Marketplace Fairness Act, that could erode this alleged competitive advantage for e-tailers. Following events that indicated an increased likelihood of federal sales tax legislation, we find negative abnormal stock returns for e-tail firms relative to traditional retail firms. We also find that analysts forecast a future reduction in sales revenue for e-tailers. These findings imply the existence of a competitive advantage for e-tailers that will potentially diminish with the enactment of federal sales tax legislation.</abstract><cop>Chicago</cop><pub>National Tax Association</pub><doi>10.17310/ntj.2016.1.05</doi><tpages>36</tpages></addata></record> |
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| ispartof | National tax journal, 2016-03, Vol.69 (1), p.133-168 |
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| language | eng |
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| source | Education Source (EBSCOhost); Alma/SFX Local Collection; JSTOR; EBSCOhost Business Source Complete |
| subjects | Abnormal returns Competition Competitive advantage Electronic commerce Methods Online shopping Retail stores Sales tax Sales taxes Studies Tax evasion Taxation |
| title | DOES USE TAX EVASION PROVIDE A COMPETITIVE ADVANTAGE TO E-TAILERS? |
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