Special Tax on Large Stores

Date: 20 Mar 2006 | posted in: Retail | 0 Facebooktwitterredditmail

In the mid 2000s, several states considered legislation that would impose a tax on large retail stores.  None of these bills  passed, but we include two examples here.

One argument for taxing large retailers is that they impose costs on state and local government in the form of public assistance programs, such as a Medicaid, for low-wage big-box employees, as well as high infrastructure and services costs associated with sprawling development. (See our Key Studies page for details on these costs.)

Another argument for a tax is that it would discourage certain types of development.  In the case of the Maine bill below, the measure imposes a 3 percent tax on the revenue of retailers over 60,000 square feet that are not located in a downtown — thus creating an incentive to focus retail development in town centers rather than out on the fringe.

The Minnesota bill imposes a graduated tax (1 to 2 percent) on the revenue of retailers with at least $20 million in annual sales that either do not pay a living wage or have more than one-quarter of their employees working part-time. This would provide an incentive for big-box retailers to offer higher quality jobs.

The revenue generated by the tax can be used to offset some of the impacts of large retailers. The Maine bill transfers one-third of the revenue to the state’s Small Enterprise Growth Fund and two-thirds to Dirigo Health, a state program that provides health insurance plans for small businesses and the self-employed.


Rules

Special Tax on Large Stores – Maine

This bill would impose a 3 percent tax on the gross receipts (total sales) of any stores over 60,000 square feet that are located outside of a downtown. … Read More

Special Tax on Large Stores – Minnesota

This bill would impose a tax on the gross receipts (revenue) of retail stores that have more than $20 million annually in sales and either do not provide employee compensation worth at least $22,000 per year (including wages, insurance, vacation, and other benefits) or have more than one-quarter of their employees working less than 40 hours a week.… Read More
Follow Stacy Mitchell:
Stacy Mitchell

Stacy Mitchell is co-director of the Institute for Local Self-Reliance, and directs its Independent Business Initiative, which partners with a wide range of allies to implement policies that counter concentrated power and strengthen local economies.