Privilege tax

Privilege tax

A privilege tax is a tax levied in exchange for a privilege or license granted to the taxpayer. The fee for registering a motor vehicle is one example of a privilege tax.

Many taxes on businesses are characterized as privilege taxes. For example, Arizona's transaction privilege tax is a gross receipts tax on business. In the 1911 case of Flint v. Stone Tracy Co., the United States Supreme Court upheld the constitutionality of a corporate income tax, determining that it was an indirect tax on the privilege of doing business as a corporation. [1]

References

  1. ^ Oxford Companion to the US Supreme Court: Income Tax, accessed on answers.com, April 30, 2011

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  • privilege — A particular and peculiar benefit or advantage enjoyed by a person, company, or class, beyond the common advantages of other citizens. An exceptional or extraordinary power or exemption. A peculiar right, advantage, exemption, power, franchise,… …   Black's law dictionary

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  • tax farmer — noun (esp historical) A tax gatherer who pays a fixed sum for the right to collect taxes, retaining the revenue as income • • • Main Entry: ↑tax * * * tax farmer, (formerly) a person who bought from his government the privilege of being tax… …   Useful english dictionary

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  • tax law — Introduction       body of rules under which a public authority has a claim on taxpayers, requiring them to transfer to the authority part of their income or property. The power to impose taxes is generally recognized as a right of governments.… …   Universalium

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