Sales Taxation: Critical Issues in Policy and Administration.

• Author: McDonald, J. Patrick

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...