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Sales Taxation: Critical Issues in Policy and Administration.

This publication is an excellent resource for understanding historical and current trends of sales taxation. It provides the reader with a broad overview of critical issues, policies and future decisions governments will face as the costs of providing goods and services increase and revenues decrease. The material was the result of bringing together many of the nation's leading authorities on sales and use taxation at the National Tax Association Seminar in New Orleans in 1991.

The book's four sections include detailed and informative illustrations. The first section focuses on trends, issues and tax policy for the next decade. It describes such areas as tax-base concepts, economic factors, and the need for state and local governments to restructure their fiscal systems in order to expand their tax base to cover increasing governmental costs. Additionally, it addresses information concerning tax rates, a federal consumption tax and equity in broad-base taxing.

The second section concentrates on the sales tax and how it is applied to services. The author describes the difference between sales of goods versus sales of services. This section outlines various issues such as arguments for and against taxing services, business purchases versus personal purchases, a consumption tax and developing a service tax structure. Also introduced in this section is a tax administrator perspective on taxing services and an informative table that compares the number of services taxed by category and state.

The third section deals with emerging problems with applying sales taxes. It discusses the sales taxation of mergers and acquisitions and how any form of change can result in different tax results, placing the success on tax planning and tax structure. It also describes sales taxation of nonprofit organizations: purchases and sales and reasonable approaches in the general context of sales taxation. Additionally, this section analyzes the First Amendment limitations on sales and use taxation in regards to the press, as well as reviews the Leathers v. Medlock decision and other pertinent court cases. Lastly, this section addresses the need for new thinking and expected changes in terms of sales tax on international transactions.

The final section of this publication addresses issues in sales tax structure, particularly the issue of whether to rely on credits or exemptions to reduce the regressivity of the sales tax. It also discusses implications for growth and stability with expanding the sales tax base. The author points out that the growth and stability of state tax systems will depend on the future decisions made by state policymakers, on the structure of the sales tax and on the state's reliance on its major revenue sources.

I strongly recommend this book to individuals who work in financial revenue areas of government, as well as to those interested in familiarizing themselves with issues and challenges that lie ahead for policymakers concerning building and expanding tax bases and revenue sources.

Sales Taxation is available for $45, plus $4 shipping and handling, from Greenwood Publishing Group, 88 Post Road West, Box 5007, Westport, CT 06881 (800/225-5800).
COPYRIGHT 1993 Government Finance Officers Association
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Author:McDonald, J. Patrick
Publication:Government Finance Review
Article Type:Book Review
Date:Aug 1, 1993
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