Gross Receipts and Margin Taxes

State governments have traditionally raised revenue from business by taxing corporate income. But in recent years the growing difficulty of administering state corporate income taxes has prompted a resurgence in one of the world’s oldest broad-based tax structures: the gross receipts tax, also known as the “turnover tax.”

Gross receipts taxes have a simple structure, taxing all business sales with few or no deductions. Because they tax transactions, they are often compared to retail sales taxes. However, while well designed sales taxes apply only to final sales to consumers, gross receipts taxes tax all transactions, including intermediate business-to-business purchases of supplies, raw materials and equipment. As a result, gross receipts taxes create an extra layer of taxation at each stage of production that sales and other taxes do not—something economists call “tax pyramiding.”


Related Articles

Oregon’s Gross Receipts Tax Proposal Would Hurt Job Creation

July 19, 2016

Oregon’s Gross Receipts Tax Would Be Regressive

July 19, 2016

Oregon’s Gross Receipts Tax Proposal Would Increase Consumer Prices

July 18, 2016

Oregon’s Gross Receipts Tax Proposal Would Be the Largest Tax Increase on Residents in the State’s History

July 18, 2016

#TBT to Some Vintage Tax Foundation Research That is Even More Important Today

June 2, 2016

The Economic Effects of M97

May 23, 2016

Nevada Supreme Court Permits Challenge to Commerce Tax, But With Short Timeframe

May 11, 2016

Oregon’s Initiative Petition 28

April 28, 2016

Oregon Measure 97: The Threat to Oregon’s Tax Climate

April 28, 2016

Oregon Legislator Floats a Gross Receipts Tax

February 4, 2016

Businesses Love Texas, Except this One Tax that Holds the State Back

January 8, 2016

Ohio Budget in the Home Stretch

June 22, 2015

Ohio Senate Mulling Tax Changes, Good and Bad

June 19, 2015

Nevada Approves Commerce Tax, A New Tax on Business Gross Receipts

June 8, 2015

Why Do So Many Businesses Incorporate in Delaware?

June 4, 2015

Texas Legislature Passes $2.56 Billion Tax Cut Package

June 1, 2015

Nevada Governor Releases Outline of Revised Tax Plan

May 15, 2015

Texas House and Senate Weigh Different Tax Cut Options

April 29, 2015

Ohio House Markedly Improves on Gov. Kasich’s Budget Plan

April 21, 2015

Texas Senate Passes Margin Tax and Property Tax Bills

April 2, 2015