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Note: The following is an excerpt from the introduction to the
article as published in The State and Local Tax Lawyer. Author citations have been
omitted for brevity.
THE CONTINUING EVOLUTION OF GROSS RECEIPTS TAXES
Giles Sutton, Nicholas E. Ford, Jamie C. Yesnowitz, and Chris Hopkins*
I. INTRODUCTION AND SCOPE
Gross receipts taxes have been part of the lexicon of taxation for as long as man has imposed taxation on commerce. Although it appears in many forms and is assigned different names such as excise, value-added, sales, customs and duties, and gross receipts taxes, the underlying mechanics are similar. The basic concept is that a taxing body imposes a tax, of whatever rate, on a transaction based on either the transaction’s occurrence or the value of the transaction.
While it is not intended to be an exhaustive study of all known gross receipts-based tax regimes, this Article explores recent developments in the area of state and local gross receipts taxes. Part II provides a brief overview of historically imposed gross receipts taxes. Part III addresses the recent trend among state and local jurisdictions towards various forms of gross receipts taxes and highlights the commonalities and distinctions between various regimes. Parts IV and V present potential planning issues surrounding the imposition of the new gross receipts taxes, and conclusions as to the impact,—from an economic, policy, and tax planning perspective,—that the movement toward gross receipts-type taxes will have on corporate America.
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* Giles Sutton, J.D., LL.M., is a Partner in the State and Local Tax practice of Grant Thornton LLP in the firm’s National Tax Office in Washington, DC. Nicholas E. Ford, J.D., LL.M., is a Senior Associate in the State and Local Tax practice in the firm’s Philadelphia Office. Jamie C. Yesnowitz, J.D., LL.M., is a Manager in the State and Local practice in the firm’s National Tax Office in Washington, DC. Chris Hopkins, CPA, CLU, ChFC, is a Partner, and the office’s State and Local Services practice leader, in the firm’s Philadelphia office.
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