What are the forces moving the Minnesota economy? Adam Belz tries to identify the trends and show the connections between Minnesota and the larger U.S. and global economies. You can connect with him on Twitter: @adambelz

Here's stuff I read about sales tax policy

Posted by: Adam Belz under Business trends Updated: February 8, 2013 - 12:28 PM
I just filed a general story about Dayton's sales tax proposal. Should be in the paper Friday.
 
Here are some links on the tax and tax policy in general:
 
- The Minnesota Department of Revenue put together an informational sheet on which new services will be taxed under the plan, and how much revenue each category will generate. It's here.
 
- Florida's legislature famously extended its state sales tax to professional services in 1987. The tax was repealed six months after it went into effect. Walter Hellerstein, a tax expert at the University of Georgia Law School who helped draft the law, wrote an account of what happened for the National Tax Journal. It's clearly written.
 
- This article on the distributional fairness of sales tax, which I'm sure you're dying to read, shows that sales tax on services is slightly less regressive** than sales tax on commodities. It includes a nice summary of what happened when Florida gave itself a sales tax on business inputs: “a tax on business inputs has a very substantial direct impact on a small number of politically astute and sophisticated taxpayers.” 
 
- Tourists on the islands carry a heavier burden of the sales tax, because of tax pyramiding in Hawaii. It's got the broadest sales tax on services of any state. The General Excise Tax functions just like a sales tax and it happens to work for Hawaii because the place is isolated and highly dependent on tourism. 
 
- Something on the way sales taxes distort business inputs.
 
- Recent Hawaii state tax commission report.
 
- This article from the Florida State University Law Review has a good discussion of the cascading effect of a sales tax on business-to-business services.
 
**regressive is a technical term for a tax that falls more heavily on the poor in proportion to their income

 

ADVERTISEMENT

Connect with twitterConnect with facebookConnect with Google+Connect with PinterestConnect with PinterestConnect with RssfeedConnect with email newsletters

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT