AND REVENUE ESTIMATION

Local sales tax rate differentials are evaluated in a theoretical model allowing for increasing cost industries and consumer transportation cost. It is show n that the tax rate differential variables used in previous research lead to an underestimate of the effects onjurisdiction sales and that the effects should vary by commodity type. Evidence for the District of Columbia metropolitan area partially confirms previous research findings that local tax rate differentials significantly affect sales locations, although ways of reducing this effect are indicated