College
College of Business Administration
Date of Last Revision
2026-02-26 11:46:02
Major
Economics
Honors Course
ECON 496
Number of Credits
3
Degree Name
Bachelor of Arts
Date of Expected Graduation
Spring 2026
Abstract
The 2018 Supreme Court decision in South Dakota v. Wayfair, Inc. (Wayfair) overturned the longstanding physical presence rule for state sales tax collection, enabling states to enforce tax obligations on remote sellers through marketplace facilitator and economic nexus laws (Oyez, 2018). This study investigates the effects of these two post-Wayfair tax laws on state sales tax revenues, entrepreneurship, and public expenditures across all 50 states. Using a two-way fixed effects difference-in-differences (TWFE DID) framework, this research analyzes how policy adoption influenced per-capita outcomes in tax revenue, firm formation, and government spending in social services, education, infrastructure, and security. The findings indicate that marketplace facilitator and economic nexus laws did not significantly change state sales tax revenues or firm establishment rates for small businesses. However, the adoption of marketplace facilitator laws is associated with a statistically significant decline in per-capita social services spending. Control variables such as state sales tax rates, GDP, and personal income were consistently significant predictors of both revenue and spending. The implications of this study are critical for policymakers assessing the effectiveness of marketplace facilitator laws and economic nexus and their broader economic consequences. Limitations include potential lags in policy effects and unobserved differences in state enforcement.
Research Sponsor
Dr. Sucharita Ghosh
First Reader
Dr. Ali Enami
Second Reader
Dr. Dibyajyoti Sinha
Honors Faculty Advisor
Dr. Ali Enami
Proprietary and/or Confidential Information
No
Community Engaged Scholarship
No
Recommended Citation
Pastoria, Maxwell, "Expanding State Tax Authority: Public and Private Sector Impacts of Wayfair" (2026). Williams Honors College, Honors Research Projects. 2091.
https://ideaexchange.uakron.edu/honors_research_projects/2091