More on the Sales Tax

More on the Sales Tax

July 31, 2006 Posted by J. Scott Moody - No Comments

Another very useful source of data that I could have included in my sales tax paper comes from the “Maine Tax Incidence Study” published by the Maine Revenue Service. In terms of sales tax pyramiding, MRS estimates that 32.1 percent of sales tax collections are derived from business-to-business transactions. This is nearly the exact same percentage found by the COST study cited in my sales tax paper. This additional information again points out that sales tax pyramiding is a major problem of the sales tax and makes it very economically destructive–reducing income and jobs for all Mainers.
In addition, the MRS study finds that only 7.7 percent of the sales tax is paid by non-residents. This deflates the myth that the sales tax is primarily paid by “people from away” who vacation in Maine.