Local sales tax exportation: The impact of commuters, tourists, and college students on the tax base.

Local sales tax bases are determined by factors including businesses, residential populations, and nonresidential visitors. This paper capitalizes on the COVID‐19 pandemic, using the sudden absence of in‐commuters, tourists, and college students to estimate the contributions these populations have on the sales tax base in North Carolina's 100 counties. The findings suggest that losing one in‐commuter results in a loss of roughly $1000 a month in taxable sales. Similarly, the loss of one hotel night booking results in a loss in taxable sales of approximately $525. This translates, for the median county, to exporting 17% to in‐commuters and 12% to tourists. The impact on the loss of a residential college student is less clear. Key Takeaways: Nonresidents, such as commuters, tourists, and college students, are important components to many local governments' sales tax base.A single in‐commuter is estimated to contribute approximately $1000 to the local sales tax base, which translates to about 17% of the tax base for the median county in our sample.The contribution to local sales for a hotel night stay, our proxy for tourism, is estimated to be approximately $525 to the local sales tax base, which translates to about 12% of the tax base for the median county in our sample.We do not find evidence that college students contribute meaningfully to the local sales tax base.This paper informs policy conversations around tax leakage, revenue‐raising capacity, and the benefits and costs of local sales taxes. [ABSTRACT FROM AUTHOR]