Abstract

http://ssrn.com/abstract=1939231
 
 

Footnotes (50)



 


 



An Industry-Specific VAT in Michigan - Objective Valuation in the Retail Gasoline Trade


Richard Thompson Ainsworth


Boston University - School of Law; NYU - Graduate Tax Program

October 5, 2011

Boston Univ. School of Law, Law and Economics Research Paper No. 11-47

Abstract:     
New York adopted an industry-specific value added tax (VAT) to solve problems with virtual intermediaries (room remarketers) under its hotel accommodations tax. The New York VAT resembles the VAT used in the European Union (EU). It is a credit-invoice VAT that subjectively values supplies.

Michigan has also adopted an industry-specific credit-invoice VAT, however the targeted industry is the retail gasoline trade. The valuation method is objective, rather than subjective. In valuing supplies objectively rather than subjectively, the Michigan VAT resembles the exception provisions that are found in most VATs around the globe. Objective valuations are used in VATs when dealing with inherently problematical transaction types.

The central point is that Michigan, like New York, has departed from the traditional American approach of taxing consumption in a single stage (directly from the consumer through a retail sales tax). Michigan is doing this because it wants to capture the administrative benefits of utilizing a multi-stage levy. What New York and Michigan are interested in securing is: a larger and more stable and revenue flow through the VAT’s fractioned payment mechanism, and a more easily audited tax regime through a leveraging of the VAT’s self-enforcement mechanisms.

Number of Pages in PDF File: 13

Keywords: VAT, Retail Sales Tax, Retailer's Occupancy Tax, ROT, Michigan sales tax, Zapper, Illinois, Lisa Madigan, Gasoline tax fraud, Objective valuation, Subjective valuation, SDC, BMC Inc

JEL Classification: K00, K34, K42

working papers series





Download This Paper

Date posted: October 5, 2011  

Suggested Citation

Ainsworth, Richard Thompson, An Industry-Specific VAT in Michigan - Objective Valuation in the Retail Gasoline Trade (October 5, 2011). Boston Univ. School of Law, Law and Economics Research Paper No. 11-47. Available at SSRN: http://ssrn.com/abstract=1939231 or http://dx.doi.org/10.2139/ssrn.1939231

Contact Information

Richard Thompson Ainsworth (Contact Author)
Boston University - School of Law ( email )
765 Commonwealth Avenue
Boston, MA 02215
United States
NYU - Graduate Tax Program ( email )
Bobst Library, E-resource Acquisitions
20 Cooper Square 3rd Floor
New York, NY 10003-711
United States
Feedback to SSRN


Paper statistics
Abstract Views: 450
Downloads: 54
Download Rank: 230,735
Footnotes:  50

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo7 in 0.250 seconds