There are not many questions of public policy that economists widely agree upon. The benefits of free trade, negative impacts of rent controls, and the infeasibility of returning to a gold standard, are a few.  Add to that list the use of tax-exempt municipal bonds to subsidize the construction of professional sports complexes, a practice that 85% of surveyed economists disagree with.

Econ Piggy

In 2016, shoppers in 17 states will have the opportunity to purchase certain items free of sales tax on what are known as sales tax holidays. Widely popular with consumers, sales tax holidays are often pitched as a win-win for everyone; spurring further local economic growth while giving taxpayers’ pocketbooks some much needed relief. Recent findings, however, suggest that these holidays are often ineffective fiscal tools.

In March 2015, U.S. Supreme Court Justice Anthony Kennedy wrote a concurring opinion for Direct Marketing Association v. Brohl stating that the “legal system should find an appropriate case for this Court to re-examine Quill.” Two lawsuits out of South Dakota and Alabama might be exactly the case Kennedy had in mind. 

In the last month, legislation to eliminate the so-called “tampon tax” has been passed in New York, Connecticut and Illinois. The push to exempt tampons, pads, and other feminine hygiene products from state sales taxes has come amid criticism that the tax unfairly affects women. Supporters argue that menstrual products should be treated like other medical necessities, which are currently tax exempt in most states.

San Francisco startup Airbnb is a vital part of what’s known as the sharing economy as it connects property owners with travelers seeking unique travel accommodations. As some states find themselves in budgetary binds, looking to Airbnb and similar businesses for additional revenue may prove a popular option. As of July 1, 2016, ten states require Airbnb to collect and remit applicable state lodging and sales taxes.

Researchers at the Harvard School of Public Health say yes, using a sophisticated microsimulation model to predict impacts of the tax. In a report released last month, the Harvard researchers calculated the proposed soda tax in Philadelphia would prevent 2,280 cases of diabetes each year once the tax is fully implemented. The Harvard microsimulation model assumes lower consumption if the city implements the three cents tax per ounce of sugar-sweetened beverage, a 49 percent price increase.

States may reap some revenue rewards following the rollout of new rules by the U.S. Treasury Department related to corporate income taxes. On April 4, 2016, the U.S. Treasury Department announced the issuance of new regulations that are intended to make it more difficult for companies to pursue corporate inversions—the practice used by companies to reincorporate overseas in order to reduce their tax burden on income earned abroad—and to reduce subsequent profits for tax purposes through a tactic called earnings stripping. Earnings stripping is a technique employed by companies after a corporate inversion to minimize U.S. tax obligations by transferring debt to a foreign parent company and declaring the interest on the debt as a deduction.

In 2016, 45 states plus the District of Columbia have sales taxes in place and five states do not. Tax rates in 2016 remained relatively unchanged from 2015, but have been creeping slowly upward over the past decade.

As of Feb. 2, 2016, scholarship tax credits were available in 18 states. Scholarship tax credit programs are used to provide a form of school choice, allowing individuals or corporations to receive a tax credit on state taxes for donations made to grant private school scholarships. Scholarship tax credit programs are also known as tuition tax credits and education tax credits. Some states provide parents the opportunity to deduct all or a portion of their child’s private school tuition from their state taxes. Others provide corporations the ability to donate to an approved non-profit scholarship funding organization and apply for a tax credit for the donation.

The Tenth Circuit held that a Colorado law requiring remote sellers to inform Colorado purchasers annually of their purchases and send the same information to the Colorado Department of Revenue is constitutional.

In Quill Corp. v. North Dakota, decided in 1992, the Supreme Court held that states cannot require retailers with no in-state physical presence to collect use tax. To improve tax collection, in 2010 the Colorado legislature began requiring remote sellers to inform Colorado purchasers annually of their purchases and send the same information to the Colorado Department of Revenue. The Direct Marketing Association sued Colorado in federal court claiming the law was unconstitutional under Quill