Publications
Gross Receipts 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."
Additional questions about gross receipts taxes? Contact us at (202) 464-6200.
Publications from The Tax Foundation
- 2012 State Business Tax Climate Index, by Mark Robyn, January 25, 2012
- Ranking State and Local Sales Taxes, by Scott Drenkard, September 22, 2011
- Texas Margin Tax Experiment Failing Due to Collection Shortfalls, Perceived Unfairness for Taxing Unprofitable and Small Businesses, and Confusing Rules, by Joseph Henchman, August 17, 2011
- Nevada May Consider New Business Taxes, by Joseph Henchman, May 18, 2011
- Michigan Gov. Snyder’s Budget Improves Competitiveness but Costs Individuals, by Alex Wood-Doughty and Kail Padgitt, March 9, 2011
- Ranking State and Local Sales Taxes, by Kail Padgitt, February 3, 2011
- Recent State Tax Reforms in the United States and Opportunities for California at a Time of Fiscal Challenge (Testimony before California's Select Committee on Recovery, Reform, and Realignment), by Joseph Henchman, February 2, 2011
- Testimony of Joseph Henchman Before the U.S. House Committee on the Judiciary, Subcommittee on Commercial and Administrative Law--Hearing on the Impact of Congressional Legislation on State and Local Government Revenues, by Joseph Henchman, April 15, 2010
- Wishful Thinking About Tax Burdens in Ohio, by Mark Robyn and Rob Shrum, April 7, 2010
- Slideshow: Ohio's Tax Climate, January 7, 2010
- Ohio's Poor Tax Climate at the Heart of the State's Economic and Fiscal Woes, by Scott A. Hodge, January 7, 2010
- The Dam Bursts in the Beaver State: Oregon’s Wave of Tax Increases and New Spending, by Joseph Henchman and Jack Mountjoy, July 9, 2009
- Economic Incidence: Consumers May Not Remit Ohio’s Tax on Grocery Sales, But They Pay It, by Joseph Henchman, Maurice Thompson and Justin Burrows, May 26, 2009
- U.S. States Lead the World in High Corporate Taxes, by Scott A. Hodge, March 18, 2008
- The Hidden Tax for Sm(all) Business in Governor Blagojevich's Gross Receipts Tax, by Chris Atkins, March 29, 2007
- Gross Receipts Taxes in State Government Finances: A Review of Their History and Performance, by John L. Mikesell, January 31, 2007
- Tax Reform in Michigan: Replacing the Single Business Tax, by Chris Atkins and Jonathan Williams, January 24, 2007
- Tax Pyramiding: The Economic Consequences of Gross Receipts Taxes, by Andrew Chamberlain and Patrick Fleenor, December 4, 2006