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

Trend #3: Corporate Tax Reductions

June 13, 2012

Location Matters U.S. Map

March 2, 2012

When It Comes to Business Taxes, Location Matters

March 1, 2012

Location Matters

February 29, 2012

Location Matters Results by State

February 29, 2012

Location Matters: Firm-Specific Tables

February 29, 2012

Location Matters Summary Tables: New and Mature Firms

February 29, 2012

Location Matters (PowerPoint Presentation)

February 29, 2012

State Gross Receipts Taxes as of January 1, 2012

February 16, 2012

Michigan Implements Positive Corporate Tax Reform

February 10, 2012

State Business Tax Climate Index– Sales Tax Index, 2011-2012

January 25, 2012

Major Components of the State Business Tax Climate Index, FY 2012

January 25, 2012

Some Rather Important and Unspecified Details of 9-9-9

October 17, 2011

What would Warren Buffett pay under 9-9-9?

October 14, 2011

Texas Margin Tax Experiment Failing Due to Collection Shortfalls, Perceived Unfairness for Taxing Unprofitable and Small Businesses, and Confusing Rules

August 17, 2011

Congressman Fattah Responds to Our Critique of His Transaction Tax Plan

July 26, 2011

Podcast with Attorney Dirk Giseburt on the Limits of State Tax Authority

July 14, 2011

1% Transaction Tax to Save the Country?

July 14, 2011

Map: Top State Corporate Income Tax Rates, as of January 1st, 2011

June 2, 2011

New Podcast with Will Newton on Taxes and Spending in the Lone Star State

May 27, 2011