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History of Sales Tax in the United States

As we approach the end of November, we face the largest shopping season in the United States. The weekend following Thanksgiving has two specific days entirely dedicated to retail shopping—"Black Friday" and "Cyber Monday." Depending on where you live in the U.S., you may be paying a substantially higher or lower sales tax than fellow shoppers in neighboring states.

What constitutes a retail sale and which goods are subject to tax varies across the nation. The rates for sales tax fluctuate by jurisdiction and range from less than 1% to more than 10%. Almost all jurisdictions provide tax exemptions or lowered tax rates for numerous categories of goods and services. Most jurisdictions exempt food sold in grocery stores, prescription medications, and many agricultural supplies.

Mississippi was the first state to adopt a sales tax in 1930. As the United States endured the Great Depression, many states were in desperate need of revenue as property and income tax collection declined. The adoption of a sales tax was quick spread across the nation. Toward the end of the 1930s, 22 states had enacted a sales tax. The District of Columbia and six other states joined this trend by the 1940s. By the 1960s, 45 states in total embraced the sales tax. Vermont was the last to join in 1969. Only five states currently remain without a statewide sales tax—Alaska, Delaware, Montana, New Hampshire, and Oregon.

The following map from TaxFoundation.org displays the years in which states adopted a sales tax, and also includes those that have decided against one.

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HeinOnline is incredibly well-known for its Law Journal Library, which currently contains more than 2,300 law and law-related periodicals. Performing a search for history AND ("consumer tax"~10 OR "consumer taxes"~10) will search across all HeinOnline collections for the word "history" and the words "consumer tax" or "consumer taxes" within 10 words of each other.* This search query retrieves more than 31,000 results across HeinOnline and more than 5,000 results in the Law Journal Library:

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Selecting the first search result directs you to an article from Tax Magazine. As you will notice in the article listed below, HeinOnline highlights the words in your search query so you may review if the document is relevant to your search needs.

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There are two collections in particular that provide a wealth of tax related information in the United States.

  • Taxation & Economic Reform in America (TERA)'s historical archive contains thousands of volumes and millions of pages of legislative history materials and other documents. It includes the complete Carlton Fox Collection, which has nearly 42 years of historical legislation related to the internal revenue laws from 1909-1950. TERA includes more than 100 other legislative histories related to taxation, economic reform, and stimulus plans.
  • Tax Foundation Archive Publications provides convenient access to the complete archive of the Tax Foundation’s publications, which contain information on taxation, fiscal policy, finance and more. No other fiscal organization in the country enjoys the respect and reputation for objectivity earned by the Tax Foundation.

To research the history of sales tax in the United States using these two collections, select the Advanced Search option from the HeinOnline Welcome Page. Within the Advanced Search field, type the phrase: history AND "sales tax"~5. Using this phrase will search across HeinOnline for the word "history" and the words "sales tax" within five words of each other. Use the facets located on the left side of the page to include results from only TERA and Tax Foundation Archive Publications.

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Selecting the first search results directs you to the Recent Trends in Major State Taxes, located in Tax Foundation Archive Publications:

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Use the National Survey of State Laws database to make basic state-by-state comparisons of major tax laws. Browse laws either by category or by topic. To view the tax laws for a specific state, select 'Tax Laws' under the category section, and then select Consumer Taxes as a sub-category:

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Once you have selected consumer taxes, the database will display a state-by-state comparison of consumer taxes. Columns are categorized by each type of consumer tax (sales tax, cigarette tax, liquor tax, etc.). This database is updated twice a year, so information is always kept up-to-date.

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*For help with searching in HeinOnline, please refer to our Advanced Search Syntax User's Guide or Searching 101.

For help searching or navigating in HeinOnline, please contact our support team at (800) 277-6995, email us, or chat with us. To request pricing information for TERA, Tax Foundation Archive Publications, National Survey of State Laws, or any other collection in HeinOnline, please contact our marketing team at marketing@wshein.com

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