Sales Taxes

Sources of Government Revenue in the OECD, 2024 Update

Designing tax policy in a way that sustainably finances government activities while minimizing distortions is important for supporting a productive economy.

Evaluating the Proposed Tax Changes in Illinois Governor’s FY 2025 Budget

In his FY 2025 budget, Illinois Gov. Pritzker outlined a number of proposed tax changes, including to individual and corporate income taxes, state sales taxes, and sports betting excise taxes.

Virginia Considers Expanding Its Sales Tax Base to B2B Digital Services

Expanding Virginia’s sales tax base to include B2B digital transactions could lead to tax pyramiding, hide the true cost of government, and make the sales tax system much less neutral and transparent.

Costly Inputs: Unraveling Sales Tax’s Impact on Businesses

Sales taxes go beyond a few extra bucks at the register. It’s not just about what you pay, but who pays. What are the implications of state sales tax bases across the U.S.?

Proposed “Junk Fee” Rule Would Create Inadvertent Tax Headaches

One particular provision of the Biden administration’s proposal to ban so-called “junk fees” would have unintended consequences.

State and Local Sales Tax Rates, 2024

Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for 32 percent of state tax collections and 13 percent of local tax collections (24 percent of combined collections).

A Lower, Flat Income Tax Would Promote Long-Term Economic Growth in Kansas

After years of strong revenue growth, Kansas has substantial cash reserves on hand, and policymakers on both sides of the aisle have expressed a desire to return some of the extra revenue to taxpayers.

Kentucky Sales Tax Modernization: Keeping the Sales Tax on Sales, Not Production

As policymakers continue efforts to improve Kentucky’s tax structure and competitiveness, they should keep in mind that not all offsets are created equal.

Michigan Tobacco Bills Could Reduce Revenue and Increase Smuggling

Two pieces of tobacco legislation in Michigan have the potential to decrease state tax collections by $320 million per year, deter smokers from switching to less harmful products, and increase illicit trade and crime.

Evaluating Nebraska Governor’s Plan for Property Tax Relief

Nebraskans need property tax relief and there are sound ways to provide it. However, increasing the sales tax rate to the highest in the country and dramatically increasing cigarette excises is not sound tax policy. 

State Tax Changes Taking Effect January 1, 2024

Thirty-four states will ring in the new year with notable tax changes, including 15 states cutting individual or corporate income taxes (and some cutting both).

Governor Youngkin Unveils a New Tax Plan for Virginia

Virginia Governor Youngkin unveiled the contours of a tax reform plan incorporated into his forthcoming budget, which includes three major structural elements: a reduction in the individual income tax rate, a 0.9 percentage point increase in the sales tax rate, and the broadening of the sales tax base to include some “new economy” digital services.

How High Are State and Local Tax Collections in Your State?

Contrary to initial expectations, the pandemic years were good for state and local tax collections, and while the surges of 2021 and 2022 have not continued into calendar year 2023, revenues remain robust in most states and well above pre-pandemic levels even after accounting for inflation.

Movers and Shakers in the International Tax Competitiveness Index

The 2023 version of the International Tax Competitiveness Index is the 10th edition of the report. Let’s take a look back and see how country ranks have changed over time.

Marketplace Facilitator Laws: Past, Present, and a Better Future

The current patchwork of state laws taxing marketplace facilitators is complex, burdensome, and inefficient. States should work to resolve these issues and standardize the otherwise disparate requirements—with or without an inducement from Congress or the courts.

2023 European Tax Policy Scorecard

The variety of approaches to taxation among European countries creates a need to evaluate these systems relative to each other. For that purpose, we have developed the European Tax Policy Scorecard—a relative comparison of European countries’ tax systems.

The State Business Tax Climate Index Is Your Guide to Economic “Wins Above Replacement”

2024 State Business Tax Climate Index

In recognition of the fact that there are better and worse ways to raise revenue, our Index focuses on how state tax revenue is raised, not how much. The rankings, therefore, reflect how well states structure their tax systems.

International Tax Competitiveness Index 2023

While there are many factors that affect a country’s economic performance, taxes play an important role. A well-structured tax code is easy for taxpayers to comply with and can promote economic development while raising sufficient revenue for a government’s priorities.

How Taxing Consumption Would Improve Long-Term Opportunity and Well-Being for Families and Children

Income taxes impose steeper economic costs, and often steeper administrative and compliance costs, than consumption taxes. Moving to a consumption tax would end the tax bias against saving and investment and provide an opportunity to greatly simplify anti-poverty programs embedded in the tax code.