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

Nevada Considering Problematic “Margin Tax”

New Mexico “Hard Reboot” Offers Exciting Vision, Potential Dangers in Details

Weekly Map: Sources of State and Local Tax Revenue: Sales, Excise, and Gross Receipts Tax

Texas Supreme Court Hears Challenge to Margin Tax

San Francisco Sends Problematic Gross Receipts Tax to November Ballot

Trend #3: Corporate Tax Reductions

Location Matters U.S. Map

When It Comes to Business Taxes, Location Matters

Location Matters

Location Matters Results by State

Location Matters: Firm-Specific Tables

Location Matters Summary Tables: New and Mature Firms

Location Matters (PowerPoint Presentation)

State Gross Receipts Taxes as of January 1, 2012

Michigan Implements Positive Corporate Tax Reform

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

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

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

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

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