The cost of compliance to taxpayers would also be relatively low with a gross receipts tax if few exemptions were allowed. The sales tax is exported through direct sales to tourists and other visitors to the state. It is also exported by those Vermont firms that sell products outside of Vermont and pass on any sales taxes they may have paid in the price of the product. Some of the property tax which Vermont businesses pay is exported in the same manner by those Vermont firms which pass on the property tax cost in the products which they sell outside of Vermont. Some residential property taxes are exported through the federal income tax code.
Property taxes are deductible from income for tax itemizers.
The gross receipts tax would be exported through the sale to nonresidents of goods and services subject to the tax. This would probably be considered acceptable in the case of sales to tourists and other visitors to Vermont. However, in the case of exporters of Vermont products, a competitive issue arises. Hawaii's gross receipts tax does not apply to exporters because of this concern. Should a Vermont gross receipts tax be designed to exempt exports, obviously less exportation of the gross receipts tax would occur.