Thanks for the interesting link. I've read it and here are my thoughts:

- The paper talks about business inputs, which is anything a business purchases. Businesses need to pay sales tax on items, unless they are intended for resale. So they're going to be charged sales tax for the coffee machine for the break room for example.

- I disagree that sales tax is a "household consumer"-only tax. It's just a consumption tax. No state exempts all business purchases, so this extra "household" bit is a position they're pushing. Part of their argument is similar to other anti-business tax policy papers that think tanks in the US put out regularly. The argument goes: businesses must pass all costs to consumers, therefore business taxes increase costs to consumers, therefore businesses should not be taxed since it's really consumers that pay those taxes.

- This is the pyramiding they refer to: Business needs to pay sales tax on coffee machine. If they pass this cost on to consumers, they'll increase the price of their products by a fraction of a cent, and that increase will increase the sales tax the consumer must pay (sales tax on that fraction of a cent).

- I'm not surprised by the high percentage of business purchases paying sales taxes. As the paper mentions, 79% of consumer purchases are sales tax exempt (items like food). Of the remaining 21%, many of those items are utilized by businesses.. items like desks, computers, etc. The high percentage of sales taxes being paid by business is likely due to the shear quantity of household purchases that are exempt.

- On the comparison to a gross receipts tax: If I sell pencils (an item generally subject to sales tax), I'm collecting sales tax on many purchases. The difference is that GRT would tax all revenue, versus sales tax would have exceptions for resale, sales to schools and other exempt organizations, sales shipped to areas without sales tax (or where a business doesnt have a nexus), international sales, etc. So to make the comparison work, we need to be very careful about defining the business: I sell pencils locally to end consumers, and I interrogate each customer to make sure they're not affiliated with a school, won't try to resell my pencil, etc. Once we do that, the comparison gets pretty ridiculous. In practice, these are two different tax regimes, and only by glossing over the differences can we make them sound similar.

- On vertical integration to avoid sales tax: This is a very specific scenario that I don't imagine happens too often. A business that sells X, but uses a lot of Y for some purpose not related to producing X. Additionally Y must have a very high markup (if not, the acquirer will be paying sales tax on the inputs for Y, and will save nothing on sales tax). Maybe my imagination is lacking... but I'm having a hard time coming up with a scenario where this would occur and it would be the sales tax (5-8%) that would be the deciding factor on whether to vertically integrate.

My take on this paper is what I mentioned in my 2nd point... it's an anti-business tax paper written to encourage governments to cut business taxes. You can decide your position on that. I generally think businesses should pay taxes.