1Sales Tax
Tax on sale, transfer or exchange of taxable goods or services
Collected from the purchaser by the seller and imposed on a transaction basis
Separately stated charge
2Personal Income Tax
Leading source of tax revenue (36% of state tax revenue)
Increased growth over the last several decades with widespread public support
Progressive and perceived as fairest of all state levies
3Corporate Income Tax
Accounts for 5% of state tax revenue
States and taxpayers spend considerable resources administering and complying with tax
Continues to shrink as a source of revenue due to advance planning to avoid corporate liabilities and political pressure to grant tax breaks to corporations
4State Property and Death Taxa
Generate less than 5% of total state revenue
5Specialized Excise Taxx on
Accounts for 20% of total state tax revenue
Can promote social policy objectives while raising revenues, like on alcohol, tobacco, and fuel
Regressive with little potential for sustained revenue growth
6Tax Policy Principles
1. Raising adequate revenue
2. Neutrality
3. Fairness
4. Ease of administration and compliance
5. Accountability
7Nexus standards
-Economic/factor presence (sales, use, income, franchise taxes)
-Physical presence (sales, use taxes)
-Click-through nexus (sales, use taxes)
-Agency/attribution nexus (sales, use taxes)
-Unitary nexus (income, franchise taxes)
Can be created for one type of tax but not another. Varies between states.