A. History of the Tax

The SBT was adopted in 1975 to replace a number of taxes: the state corporate income tax, the financial institutions income tax, a corporate franchise fee, a savings and loan association privilege fee, domestic insurance company privilege fee, local government property tax on inventories, and the intangibles tax on business. One major motivating factor for the adoption of a VAT-type SBT was the desire to tax all business activity fairly and comprehensively, rather than with a hodgepodge of taxes on various types of firms. [2] Note that a number of the taxes replaced by the SBT were specifically placed on the financial industry.