Read This: A glossary of tax terminology

If all the recent talk about tax credits and exemptions and tax reform have left you scratching your head, you’re not alone.  Keeping up with the tax debate – and its accompanying jargon and terminology – can challenge even the most committed news-and-politics-junkie.  Fortunately, this glossary of key terms from the Institute on Taxation and Economic Policy can help.  The glossary accompanies ITEP’s updated ‘Guide to Fair State and Local Taxes‘.  Print it out and keep a copy handy for the next time you need to make sense of the state’s tax policies.  The glossary includes definitions like:

Consumption Tax: A tax that applies to purchases of goods and/or services by individuals and businesses. These taxes include general sales taxes, which apply to retail sales, and special excise taxes on alcohol, cigarettes, and gasoline.

Gross receipts Tax (GrT): A tax on the total gross revenues of a company, regardless of their source. A gross receipts tax is similar to a sales tax, but it is levied on the seller of goods or services rather than the consumer. Applies to the sales made by companies at every stage of the production process, including manufacturing companies, wholesalers, and retailers.

Tax Base: The amount subject to tax. If all the consumers in a state purchase $1,000,000 in coffee each year, then the tax base for a coffee sales tax would be $1,000,000. However, the tax base does not have to be expressed in terms of money. If coffee was taxed by the pound, then the tax base would be the number of pounds of coffee sold.



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