Pyramiding of Tax Law and Legal Definition

Pyramiding of tax occurs when a product is taxed at the preretail stage and, thus, the tax is imposed on successive pairs of buyers and sellers rather than only at the final sale of the product to the ultimate consumer. [Jan Co. Central, Inc. v. Commissioner, 405 Mass. 686 (Mass. 1989)].

State statutes prohibit the state from collecting more than one tax on the rental for the use of the property, and prohibit the pyramiding of taxes. [Zero Food Storage Div. of American Consumer Industries, Inc. v. Department of Revenue, 330 So. 2d 765, 767 (Fla. Dist. Ct. App. 1st Dist. 1976)].