Alcabalas (sales taxes), first imposed in Spain in 1342, in Mexico in 1574, and later in the sixteenth century in other areas of the Spanish Indies. Initially all goods were taxed at 2 percent of their sale price, but in 1632 another 2 percent was added for the empire-wide Union of Arms. In 1635 the tax was increased in Mexico by still another 2 percent in order to finance the Spanish Main fleet (Armada de Barlovento). Although the rate fluctuated periodically in times of financial exigency and was widely differentiated after 1775, 6 percent prevailed in most areas of the Spanish Empire at the end of the colonial period. Certain items were exempt from the sales tax, including arms, dowries, booty, medicine, paintings, books, corn, and grain; clerics, Indians, and certain regions of the Indies were also exempt.
Until the beginning of the eighteenth century, alcabala collection was in semiprivate or private hands, normally those of the cities or the merchant guild (Consulado), whose officials periodically contracted with viceregal authorities on the amounts to be paid to the royal treasury for collection rights. In Peru in 1724 and Mexico in 1764, however, royal treasury officials began collecting sales taxes directly. By 1800 alcabalas generated close to 600,000 pesos annually in Peru and 2.5 million in Mexico.
See alsoPublic Sector and Taxation .
Recopilación de leyes de los reynos de las Indias, 4 vols. (1681; repr. 1973); libro VIII, título XIII.
Fabian De Fonseca and Carlos De Urrutia, Historia general de Real Hacienda, vol. 2 (1849).
Grosso, Juan Carlos, and Juan Carlos Garavaglia. La región de Puebla y la economía novohispana: Las alcabalas en la Nueva España, 1776–1821. Puebla, Mexico: Benemérita Universidad Autónoma de Puebla, 1996.
John Jay TePaske