Definition:
A gross receipts tax is a state tax on the gross receipts (sales) of a business; usually a state will impose a gross receipts tax instead of a corporate income tax. Sometimes referred to as a gross excise tax, this tax is passed through to the consumer. Some states allow some deductions from the gross receipts tax and some types of businesses may be exempt from these taxes. Check your state's department of revenue for more information about your state.
States which impose some sort of gross receipts tax include:
- Washington
- Arizona
- Delaware
- Hawaii
- Illinois
- Mississippi
- New Mexico
- Ohio
Also Known As: Gross Excise Tax
Examples:
Delaware's Division of Revenue imposes a gross receipts tax on the "total receipts of a business received from goods sold and services rendered in the State. There are no deductions for the cost of goods or property sold, labor costs, interest expense, discount paid, delivery costs, state or federal taxes, or any other expenses allowed."
