Inferring Tax Compliance from Pass-through: Evidence from Airbnb Tax Enforcement Agreements

Authors

Andrew J. Bibler, University of Nevada, Las VegasFollow
Keith F. Teltser, Georgia State University
Mark J. Tremblay, University of Miami

Document Type

Article

Publication Date

9-28-2021

Publication Title

Review of Economics and Statistics

Volume

103

Issue

4

First page number:

636

Last page number:

651

Abstract

Tax enforcement is especially costly when market participants are difficult to observe. The benefits of enforcement depend crucially on pre-enforcement compliance. We derive an upper bound on pre-enforcement compliance from the pass-through of newly enforced taxes. Using data on Airbnb listings and the platform’s voluntary collection agreements, we find that taxes are paid on, at most, 24% of Airbnb transactions prior to enforcement. We also find that demand for Airbnb listings is inelastic, driving three key insights: the tax burden falls disproportionately on renters, the excess burden is small, and tax enforcement is relatively ineffective at reducing local Airbnb activity.

Controlled Subject

Taxpayer compliance

Disciplines

Economics | Taxation-Federal

File Format

pdf

File Size

447 KB

Rights

IN COPYRIGHT. For more information about this rights statement, please visit http://rightsstatements.org/vocab/InC/1.0/

Repository Citation

Bibler, A. J., Teltser, K., Tremblay, M. (2021). Inferring Tax Compliance from Pass-through: Evidence from Airbnb Tax Enforcement Agreements. Review of Economics and Statistics, 103(4), 636-651.
http://dx.doi.org/10.1162/rest_a_00910