Tax expenditures are tax breaks targeted to specific individuals, businesses, or activities that are often presented as achieving goals similar to direct government spending programs. Nearly every state publishes a tax expenditure report that describes specific tax expenditures and their revenue impact. However, the quality of state tax expenditure reports varies considerably, and several common shortcomings limit their usefulness, including:Incomplete c overage: Some states exclude major tax expenditures altogether. For example, some states tax the sales of goods but not services but fail to acknowledge the exemption of services as a tax expenditure. Greater transparency around tax expenditures leads to better informed tax policy debates, and comprehensive reports are an essential tool for achieving that transparency.