state income tax

There are a growing number of states looking at the gross receipts tax as an option for collecting tax from businesses. Why? That’s the easy part to answer. States need money. Some states such as Texas have a state constitution that forbids taxing income at the state level. So, how do they raise needed money?

The answer is the gross receipts tax. There are currently a handful of states that have a form of this tax. These include Arizona (only for 16 industries), Delaware, Hawaii, Illinois, MIssissippi, New Mexico, Ohio, Texas and Washington.

There seems to have been a theme over at the First Class Lounge forum this past week. Watch out for aggressive states! States are going broke and they are going to only get more desperate for funding. And, at the same time, eCommerce is cutting a big hole in their sales tax revenue.