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Coordinating Federal and Provincial Sales Taxes: Lessons from the Canadian Experience

Author

Listed:
  • Richard M. Bird
  • Jack M. Mintz
  • Thomas A. Wilson

    () (International Tax Program, Rotman School of Management, University of Toronto)

Abstract

Canada has operated both a federal value-added tax (the GST) and two variants of provincial VATs for the last 15 years. In addition, several provinces have continued to operate retail sales taxes similar to those in most US states. A brief review of experience around the world with 'two-level' sales tax indicates that Canadian experience is the most relevant international experience for the US to consider. We conclude that the Canadian case suggests that the introduction of a federal VAT in the US would not create any great technical problems for eithere the states or business.

Suggested Citation

  • Richard M. Bird & Jack M. Mintz & Thomas A. Wilson, 2006. "Coordinating Federal and Provincial Sales Taxes: Lessons from the Canadian Experience," International Tax Program Papers 0607, International Tax Program, Institute for International Business, Joseph L. Rotman School of Management, University of Toronto.
  • Handle: RePEc:ttp:itpwps:0607
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    File URL: http://www-2.rotman.utoronto.ca/iib/ITP0607.pdf
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    References listed on IDEAS

    as
    1. M.C. Wassenaar & R.H.J.M. Gradus, 2004. "Contracting out: The Importance of a Solution for the VAT Distortion," CESifo Economic Studies, CESifo, vol. 50(2), pages 377-396.
    2. Chun-Yan Kuo & Thomas Mcgirr & Satya Poddar, 1988. "Measuring the Non-Neutralities of Sales and Excise Taxes in Canada," Development Discussion Papers 1988-08, JDI Executive Programs.
    3. Charles McLure, 2000. "Implementing Subnational Value Added Taxes on Internal Trade: The Compensating VAT (CVAT)," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 7(6), pages 723-740, December.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Michael Smart & Richard M. Bird, 2009. "The Economic Incidence of Replacing a Retail Sales Tax with a Value-Added Tax: Evidence from Canadian Experience," Canadian Public Policy, University of Toronto Press, vol. 35(1), pages 85-97, March.
    2. Rajesh Chadha, 2010. "Moving to Goods and Services Tax in India: Impact on India’s Growth and International Trade," Working Papers id:2764, eSocialSciences.
    3. Rosanne Altshuler & Barry Bosworth, 2011. "Fiscal Consolidation in America: The Policy Options," Departmental Working Papers 201120, Rutgers University, Department of Economics.
    4. Richard M. Bird, 2012. "The GST/HST: Creating an Integrated Sales Tax in a Federal Country," SPP Research Papers, The School of Public Policy, University of Calgary, vol. 5(12), March.
    5. Mare, Mauro, 2015. "Why and How should the EU budget be reformed?," MPRA Paper 76112, University Library of Munich, Germany.
    6. Peter Dungan & Jack Mintz & Finn Poschmann & Thomas Wilson, 2008. "Growth Oriented Sales Tax Reform for Ontario: Replacing the Retail Sales Tax with a 7.5 Percent Value-Added Tax," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 273, September.
    7. Michael Smart, 2007. "Lessons in Harmony: What Experience in the Atlantic Provinces Shows About the Benefits of a Harmonized Sales Tax," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 253, July.

    More about this item

    Keywords

    sales tax; value-added tax; intergovernmental coordination;

    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies

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