One problem with this approach is that tax rates are only one of many factors that affect the geographic distribution of
online sales, including (for example) the proximity of the retailer to the buyer,20 and demographic factors such as personal income, Internet penetration and broadband adoption.21 Thus, while there is some evidence that people in high tax states are more likely to shop online other things equal, there is no evidence we are aware of that suggests that differences in tax rates explain a significant portion of the variation in online retail sales across states.