9/14/2023 0 Comments De gross receipts taxAlthough they have been dismissed for decades as inefficient and unsound policy, they have returned in recent years as states seek to replace revenue lost by eroding corporate income tax bases and to limit revenue volatility.Īs the map indicates, states often designate multiple gross receipts rates, typically by industry, to mitigate some of the economic costs associated with these taxes. These taxes gained popularity among states in the 1930s but began to be repealed or struck down as unconstitutional by state courts in the 1970s. Seven states currently levy gross receipts taxes, while several others, including Pennsylvania, South Carolina, Virginia, and West Virginia, permit local taxes imposed on a gross receipts base. These taxes land on businesses and capture business-to-business transactions in addition to final consumer purchases, leading to tax pyramiding. Gross receipts taxes are applied to a company’s gross sales, without deductions for a firm’s business expenses, like compensation and cost of goods sold. Moving away from gross receipts taxes would represent a pro-growth change to make the tax code friendlier to businesses and consumers alike, which is especially necessary in the wake of the coronavirus crisis. Today’s map looks at which states levy a gross receipts tax, which is often considered one of the most economically damaging taxes. Although it’s unclear how soon state economies across the country may be able to open again, it’s not too early for states to think about how they can remove barriers to businesses and consumers resuming activity after this huge disruption.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |