Center for State Tax Policy

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

There are Better Ways to Raise Revenue in Oregon Than a Gross Receipts Tax

A Gross Receipts Tax Would Not Right-Size the Tax Base in Oregon

Resisting the Allure of Gross Receipts Taxes: An Assessment of Their Costs and Consequences

Tax Trends Heading Into 2019

San Francisco Joins California Cities Levying a Gross Receipts Tax on Cannabis

San Francisco about to Face a Legal Morass After Voters Approve Proposition C

Results of 2018 State and Local Tax Ballot Initiatives

The Negative Impact of a New Gross Receipts Tax in San Francisco

The Portland Clean Energy Fund: Creating a Sales Tax in Oregon

Testimony: Washington’s Business Tax Structure

Business Head Taxes Take Aim at Having “Too Many Good Jobs”

Gross Receipts Taxes in the Marijuana Industry Found to Cause Distortionary Effects

Washington Legislature Considers B&O Tax Surcharge

Trends in State Tax Policy, 2018

Carson, California, Considers a Gross Receipts Tax

Why Does Missouri Want a Gross Receipts Tax?

Ohio’s Commercial Activity Tax: A Reappraisal

Oregon’s Quest for a Gross Receipts Tax Ends…For Now

West Virginia Legislature Reaches Budget Agreement

Tax Reform Gridlock Could Force Immediate Special Session for Louisiana Legislature