Turnover Taxes in the States

February 2, 1939

Report Outline
Turnover Tax Plans in State Legislatures
Gross Receipts and General Sales Taxes
Gross Income Taxes in Indiana and Hawaii
Economic Effects of Turnover Taxes
Special Focus

Turnover Tax Plans in State Legislatures

Gross Earnings Taxes in New York and Wisconsin

Vexing financial problems——chiefly the result of diminished tax yields during the business recession, mounting relief and social security costs, and increased state aid to local units——face nearly all of the 43 states whose legislatures are now meeting in regular session. About half of these states already levy either a retail sales tax or some type of business turnover tax. Legislatures in many of the remaining states are now considering taxes of this type either as new sources of general revenue or as a means of financing specific services——particularly old-age pensions. Pension schemes calling for a tax on all business transactions have been offered in a number of legislatures, and strong pressure is being exerted for their enactment.

One of the most far-reaching proposals advanced during the current legislative year is the recommendation of Governor O'Daniel of Texas that the state levy a transactions tax at the high rate of 1.6 per cent, in order to raise an estimated $45,000,000 a year——$25,000,000 for payment of old-age and teachers' pensions and aid to dependent children and $20,000,000 for replacement of the existing state property tax. In a message of January 18, O'Daniel urged submission to the voters of a constitutional amendment (1) guaranteeing payment by the state of $15 monthly old-age pensions, (2) levying a transactions tax of 1.6 per cent, and (3) abolishing the state ad valorem tax on property. He said:

I have made a diligent study of many suggested means of raising the necessary revenue to pay old-age pensions and I recommend that the money be raised by the levying of a 1.6 per cent transactions tax, because I believe this will give the broadest possible base …It is essential that the tax be most widely distributed, to the end that all citizens of Texas will be required to pay a part of this tax and that they will know that they are paying it. Such a tax will then serve as a brake against fantastic schemes which may be advanced in the future.

ISSUE TRACKER for Related Reports
Feb. 07, 2020  Hidden Money
Jun. 28, 2013  Internet Shopping
Jan. 16, 1998  IRS Reform
Mar. 22, 1996  Tax Reform
Apr. 06, 1990  How Fair Is the Nation's Tax Burden?
Aug. 28, 1987  Taxing Business Services
Oct. 17, 1986  Tax Reform In The States
Sep. 28, 1984  Tax Debate: 1984 Election and Beyond
Mar. 19, 1982  Tax-Exemption Controversy
May 19, 1978  Property Tax Relief
Apr. 07, 1978  Tax Shelters and Reform
Feb. 10, 1971  Property Tax Reform
Mar. 26, 1969  Tax Reform Pressures
Mar. 24, 1965  Excise Tax Cuts and the Economy
Feb. 15, 1961  Flexible Taxation
Apr. 02, 1959  State Tax Problems
Apr. 23, 1958  Tax Reduction, 1958
Aug. 14, 1957  Fast Tax Write-Offs
Apr. 10, 1957  Federal Payments in Lieu of Taxes
Sep. 12, 1956  Corporation Profits and Taxes in Prosperity
Mar. 16, 1954  Shares in Tax Relief
Nov. 21, 1953  Revision of Excise Taxes
Mar. 19, 1953  Federal-State Tax Relations
Oct. 01, 1952  European Taxes and Tax Evasion
Nov. 03, 1950  Excess Profits Tax
Feb. 01, 1950  Tax Loopholes
Jun. 04, 1949  Excise Taxes
Oct. 27, 1948  Postwar Sales Taxes
Aug. 29, 1947  Taxation of Family Income
Apr. 09, 1947  Income Tax Relief
Jan. 11, 1946  Taxation of Cooperatives
Oct. 16, 1945  Federal Taxes on Business
May 08, 1944  Postwar Taxes
Sep. 20, 1943  Sales Taxes
Dec. 05, 1941  New Taxes for Defense
Apr. 05, 1941  Taxation for National Defense
Feb. 28, 1941  Taxation of Alcoholic Beverages
Jan. 11, 1941  Exemptions from Taxation
Dec. 04, 1940  Federal Taxes and Defense Financing
Feb. 01, 1940  Sharing of Tax Revenues
Feb. 02, 1939  Turnover Taxes in the States
Nov. 05, 1937  Broadening of the Income-Tax Base
Jun. 17, 1937  Exemptions from Income Taxation
Apr. 05, 1937  Coordination of Federal and State Tax Systems
Dec. 19, 1936  Revision of Federal Tax on Capital Gains
Nov. 02, 1936  State Taxation of Natural Resources
May 26, 1936  Assessment of Property for Taxation
Apr. 17, 1936  Federal Taxes on Consumption
Mar. 19, 1936  Taxation of Undistributed Corporate Profits
Dec. 17, 1935  Reduction of Tax Burdens on Real Estate
Oct. 21, 1935  Tax Delinquency in the United States
May 21, 1935  Comparative Tax Burdens in America and Britain
Feb. 01, 1935  Federal Taxation of Corporations
Nov. 27, 1934  Elimination of Conflicts in Taxation
Jul. 25, 1933  Taxation of Excess Profits
Jan. 25, 1933  Tax Burdens and Tax-Free Securities
Nov. 23, 1932  The Beer Tax and the Sales Tax
Dec. 19, 1931  Sales Taxes: Federal, State, and Foreign
Sep. 18, 1931  Death Taxes and the Concentration of Wealth
Mar. 18, 1931  Federal Taxation of Large Incomes
Jan. 10, 1931  Taxation of Capital Gains
Nov. 09, 1929  Federal Tax Reduction-1930
Aug. 08, 1927  Federal Tax Reduction—1928
Sep. 27, 1926  Tax Reduction and the Public Debt
Jan. 16, 1926  Taxation of Estates and Inheritances
Nov. 07, 1925  Federal Taxation of Small Incomes
Nov. 28, 1924  Social, Fiscal and Legal Aspects of the Inheritance Tax
Apr. 07, 1924  Causes and Effects of the Tax Return Blockade
Dec. 12, 1923  Tax Exempt Securities
Dec. 10, 1923  Taxation
State, Local, and Intergovernmental Relations