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

Jongmin Shon, Yilin Hou

Research output: Contribution to journalArticlepeer-review

3 Scopus citations


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.

Original languageEnglish (US)
Pages (from-to)289-318
Number of pages30
JournalJournal of Public Budgeting, Accounting and Financial Management
Issue number3
StatePublished - Mar 1 2017

ASJC Scopus subject areas

  • Public Administration
  • Strategy and Management


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