THE IMPACT OF LOCAL SALES TAX ON THE VALUE OF OWNER-OCCUPIED HOUSING

Local governments are under pressure to develop alternative revenue so urces to their property tax bases. Among their responses has been an i ncreased reliance on local sales taxes. This study examines the impact of local sales taxes on the value of owner-occupied housing in the Ph oenix metropolitan area. The results indicate that differences in loca l sales tax rates across jurisdictions are capitalized into residentia l property values in the same way as differences in property tax rates , albeit to a lesser extent because part of the sales tax burden can b e exported to nonresidents. (C) 1996 Academic Press, Inc.