Document Type



International Law | Legal History | Taxation-State and Local | Tax Law


The turnover tax, a hallmark of developing nations and even once blamed for Spain’s decline, has made a comeback in the states, starting with Ohio.

A turnover tax is a gross receipts tax that is applied every time a good or service “turns over,” that is, every time the good or service transfers from one entity to another for consideration. The tax base is therefore turnover, and the measure of the tax is gross receipts.

In this article, Professor Richard Pomp examines the turnover tax’s deep roots dating back to ancient Athens, and tracks its course from the time the Romans applied a 1% turnover tax on all goods, then on to medieval Spain, where the alcabala (cascading turnover tax) was blamed for that country’s economic decline, up through the end of World War I when many European countries adopted a turnover tax to deal with their fiscal needs after the war.

Professor Pomp notes that in Europe, the turnover tax was traded in for a VAT as soon as possible and discusses the defects of the turnover tax. The states better take heed of the old adage that “those who don’t know history are doomed to repeat it.” Professor Pomp concludes by arguing that the defects of the turnover tax deserve a broader audience.