About Colonial Taxation

By Keri Honea

Great Britain taxed their thirteen colonies of America for purposes of fund-raising to help replenish their national wealth. The taxes were simple in the mind of Parliament, and something that they practiced within their own country. The taxes were not as simple to the colonists, and this “taxation without representation” was the spark that started the American Revolutionary War.

History of

  • Colonial taxation refers to the taxation of the thirteen original British colonies of America. Great Britain amassed a rather large national debt due to the expense of the Seven Years War (or the French and Indian War). Since Britain’s victory greatly benefited their Thirteen Colonies, Parliament decided that the Thirteen Colonies should help in the fund-raising to replenish the national coffers. What better way to raise money than to create new taxes for the Colonies to pay?


  • The British Parliament imposed four Acts of taxation upon the Thirteen Colonies, the last Act being the final straw before the Revolution.The first was the Sugar Act, passed on April 5, 1764. This Act was to trump the Sugar and Molasses Act of 1733, which imposed a six pence-per-gallon tax on molasses imports other than imports from London. This tax was rarely collected due to poor enforcement, so Parliament decided that it would more likely be paid if they cut the tax in half and increased enforcement.

    Following that came the Stamp Act of 1765, which required that all legal documents, permits, commercial contracts, newspapers, wills, pamphlets and playing cards carry a tax stamp. These stamps were labels that had to be purchased for every document, and the revenue was sent back to London.

    Next was the Townshend Revenue Act, passed in 1767. This Act placed a tax on imports of common goods into the colonies, such as lead, paint, glass, paper and tea. Unlike the Stamp Act, this Act did not place taxes on the goods themselves, but on the import.

    The fourth Act, the Tea Act, was not only passed to help raise funds for the national debt, but to also help out one of Britain’s companies, the East India Company. Due to the heavy taxes imposed on the import of tea from the Townshend Revenue Act, the colonies were not importing as much tea as needed, and the company was falling into bankruptcy. Parliament decided to pass the Tea Act, which would lower the taxes on importing tea to three pence-per-pound, and the company could ship the tea directly to America. This way, the company wouldn’t have to pay the additional import tax to deliver the tea to London first. Therefore, Americans would have a lower import tax on tea and a lower price of tea.


  • The British Parliament greatly misconceived how the colonists would embrace these taxes. Britain “supported the concept of virtual representation, which was based on the belief that a Member of Parliament virtually represented every person in the empire and there was no need for a specific representative” from the colonies. Therefore, they did not see a problem with imposing these taxes upon the colonists without their consent. After all, Parliament had been imposing similar taxes on imports and stamp taxes within Britain itself, and there were no large issues there. In fact, since some of the taxes they imposed were lower than the original duties stipulated, the British really believed that the Colonists would welcome the new taxes with open arms.


  • Despite how the British thought the colonists would accept the taxes, the colonists were less than happy with the taxes imposed without their consent. They realized that there was no conceivable way for representatives to be sent over to Parliament to speak on the colonies’ behalf, but they did believe that they should assemble and govern their own taxes and import duties.The colonists began to boycott British goods and even found ways to smuggle in foreign tea. Some started to produce their own tea and other products, so that their need for British goods diminished.

    When the Tea Act was passed, it was the last straw for many colonists. They felt that this sudden preference for the East India Company made a monopoly in the tea market. Many other tea merchants in the colonies began to lose money due to this preferential treatment as well. They made their opinions known on December 16, 1773, when a group of protesters known as the Sons of Liberty dressed up as native Indians, boarded three of the East India Company’s ships docked in Boston Harbor, and dumped 90,000 pounds of tea into the Boston Harbor. The incident became widely known as the Boston Tea Party.


  • The Boston Tea Party sparked the fuse for the American Revolution, which greatly surprised Britain. Britain did not single out America for its taxation practices. Britain imposed such taxation without representation across its entire empire. Britain had no idea that something as simple (as they saw it) as taxation on tea would cause them to lose a chunk of their empire.Not only did colonial taxation help cause the Revolution, but it also helped structure the modern American government. Since the colonists were unfairly taxed without their voice, they created a government with representation for all of the colonies to make decisions on their behalf; a system that is still in place.