Search This Blog

Monday, January 16, 2017

Sales Tax Policy Outlook for 2017

I don't expect 2017 will look much different than activities of 2016.  With one change - Congress looking at a consumption tax at the federal level for business income. If that happens, there is relevance for state sales taxes.

For more, please see my policy post originally posted at SalesTaxSupport.com.

Sales tax law changes and discussions in 2017 are likely to look a lot like those of 2016, with one possible exception.
The repeating discussions and activities will include:
1) Expanding the sales tax base to include more services and digital goods.
2) Congressional hearings on the Marketplace Fairness Act without enactment of legislation.
3) Continued and expanded state efforts to get a case to the US Supreme Court to challenge the 1992 Quill decision. For more on this, see Sylvia Dion's 12/16/16 post.
The possible new item is the federal level tax reform discussions that include moving the business income tax to a consumption tax. The House Republican blueprint released in June 2016 calls for a cash-flow consumption tax where assets (other than land and inventory) are expensed, interest expense in excess of interest income is not deductible (it carries forward), imports are taxed and exports are exempt, and the tax rate is lowered. They hope that this is considered a valid border-adjustable tax by the World Trade Organization (WTO), because of the desire to tax imports and exempt exports (this will help pay for lower rates). If this cash-flow tax is not found to be border adjustable, and Congress wants such a tax, perhaps we'll see the debate move to replacing the corporate income tax (and perhaps other business income taxes) with a credit invoice VAT used by over 130 countries, and known to be border-adjustable. If that happens, that will lead to a new sales tax policy discussion - should the states convert their sales taxes to a credit invoice VAT? One issue of course, is what to do with the state level business income tax? Should it be kept if the federal business income tax ends?
Congressman Jim Renacci (R-Ohio) has introduced a tax reform plan to replace the corporate income tax with a credit invoice VAT.
For more on consumption taxes and the operation of a VAT, see my explanation here.

Let's see what happens.

What do you think?



4 comments:

Unknown said...


Hello.....Are you concerned about the state of your mortgage? Are you worried that your home might be repossessed. Phone us now to allay your fears with a fast house sale. You might be in arrears after a payment holiday. Some mortgages allow you to take a break, as long as you pay up later. This payment holiday is helpful when you need flexibility and finances are tight.Read more-house sale

Unknown said...
This comment has been removed by the author.
Unknown said...


Hello...Have a nice day. I would like to share with you a great news about property for sale.This guide was prepared this guide to assist sellers of houses to prepare their property for sale. the Real Estate markets around the world seem to be contracting so it is essential properties are well prepared and presented to maximise the sale price.See more at-property for sale

Unknown said...

Hi admin,
I read your blog, its really awesome,
I am seeing that you are selling home. I have also a site related to you.
Planning on buying a previously-rented house? Here are some things you should know first.

rental properties


Your regards
Alfaj Ripon