Sooners Desire To
Slap A Sales Tax On
The majority of states repealed their gross receipts taxes in the 1920s and 1930s and replaced them with retail sales taxes, but in the last two years, states have begun to reinvestigate gross receipts taxes.
States have been down this road before. In the mid-2000s, several states explored adding gross receipts taxes. Michigan, New Jersey, and Kentucky added gross receipts taxes, but quickly repealed them due to their economic consequences.
The experience in Michigan, New Jersey, Kentucky & Indiana reveal how gross receipts taxes have a negative impact on the economy. Indiana demonstrates how gross receipts taxes are outmoded, can tax different industries at varying effective rates, and discourage business; New Jersey demonstrates how disproportionate and arbitrary the tax can be, which places an unfair burden on businesses; Kentucky’s tax shows how some businesses are placed at a disadvantage compared to others and that investment levels dampen; and Michigan provides evidence that gross receipts taxes add layers of tax complexity that decrease competitiveness.