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Leveling the Playing Field? Tax Collection and Online Purchases

Jan 2013
Policy Brief
By  Liran Einav, Dan Knoepfle, Jonathan Levin
The tax treatment of online purchases has become a frequent topic in public policy debates. The current legal environment effectively makes a large fraction of online retail tax-free, at a time when there is significant pressure on state and local governments to generate tax revenues. In this short essay we explain the current situation and summarize various proposals that are being discussed and their possible economic impact.