Subnational Taxing Options: Which is Preferred, a Retail Sales Tax or a Vat?

Posted: 4 Mar 2003

See all articles by William F. Fox

William F. Fox

University of Tennessee, Knoxville - College of Business Administration

LeAnn Luna

University of Tennessee, Knoxville - College of Business Administration - Center for Business and Economic Research

Abstract

The authors ponder whether a retail sales tax or a value added tax is a better option for subnational governments. A national VAT in the United States could coexist with the existing retail sales tax in the states, the authors write.

If compliance is the main concern, governments might prefer to have VATs at both the subnational and national levels. However, if fiscal autonomy of the subnational governments and taxing transactions on the destination principle are most important, governments may prefer to combine a national VAT with subnational retail sales taxes, the authors say.

Suggested Citation

Fox, William F. and Luna, LeAnn, Subnational Taxing Options: Which is Preferred, a Retail Sales Tax or a Vat?. State Tax Notes, Vol. 27, No. 10, March 10, 2003. Available at SSRN: https://ssrn.com/abstract=385360

William F. Fox (Contact Author)

University of Tennessee, Knoxville - College of Business Administration ( email )

453 Haslam Business Building
Knoxville, TN 37996
United States
865-974-5441 (Phone)
423-974-3100 (Fax)

LeAnn Luna

University of Tennessee, Knoxville - College of Business Administration - Center for Business and Economic Research ( email )

711 Stokely Management Center
Knoxville, TN 37996-4334
United States
865-974-6080 (Phone)
865-974-3100 (Fax)

Register to save articles to
your library

Register

Paper statistics

Abstract Views
602
PlumX Metrics