The biggest knock on the tax is its potential for taxing a single product multiple times. The tax can cascade across sales of gasoline, for example, when the fuel is sold and resold from suppliers to distributors to customers at the pump, who then could face higher prices to cover the extra costs.
Situations like that make some economists cringe at the idea of states adopting such taxes.
"No sensible case can be made for imposing gross receipts taxes in the modern economic environment," said John Mikesell, an Indiana University public finance professor.
A national business group that opposes such taxes says that while the corporate income tax may be declining as a portion of state revenue, total taxes paid by businesses continue to grow. Companies paid a combined $550 billion last year in corporate, sales, property and other taxes, up 11 percent from the year before, according to the Washington, D.C.-based Council on State Taxation.
"Corporate income tax is not the main business tax and never has been," said Joseph Crosby, the group's legislative director.
When are we going to quit screwing around with getting income taxes "right" and just tax consumption? Income taxes "cascade across" the economy versus retail consumption taxes that get paid once. What we need to do is just repeal all income taxes.