On April 4, 2007, the Federal Reserve Bank of Chicago, the National Tax Association, and the University of Illinois’s Institute of Government and Public Affairs brought together a distinguished group of state tax experts to discuss emerging trends in business taxation.

States are showing renewed interest in using Gross Receipts Taxes (GRTs) as a method for taxing business. This paper discusses the advantages and disadvantages of GRTs along three dimensions—as a stand alone tax against standard tax principles, as a replacement for an existing business tax...