Delaware - Business and occupational gross receipts tax rates range from 0.096% to 1.92%, depending on the business activity.
GROSS RECEIPTS OR SALES CODE
Alabama - Per Article 3 of the code of Alabama, the state has imposed this type of tax on most utilities.
Several states in the United States have imposed gross receipts taxes. Criticism Įconomists have criticized gross receipts taxes for encouraging vertical integration among companies and imposing different effective tax rates across different industries. This is easiest to discern in jurisdictions like Hawaii where businesses are allowed to visibly pass on gross excise tax to their customers. Thus, the actual tax rate of a gross receipts tax is always slightly higher than the nominal tax rate. Īnother pyramid effect of the tax comes from the fact that such a tax by definition is levied against itself (in the sense that a business subject to a gross receipts tax will raise its prices to compensate, which in turn increases its gross revenue, which increases the tax owed, and so on in circles) and therefore amounts to a tax on tax. A gross receipts tax has a pyramid effect that increases the actual taxable percentage as it passes through the product or service lifecycle. This is compared to other taxes listed as separate line items on billings, are not directly included in the listed price of the item, and are not a factor in markup or profit on company sales. A gross receipts tax is often compared to a sales tax the difference is that a gross receipts tax is levied upon the seller of goods or services, while a sales tax is nominally levied upon the buyer (although both are usually collected and paid to the government by the seller).
Cost of labor: This is your cost for employees who work directly making products from raw materials and parts.If you are making products, you'll need to include the total cost of all raw materials and parts you bought during the year. Subtract any products you took out for personal use. Cost of purchases: Next, get a total of all the products you bought during the year and that you placed in inventory to sell.If it's not the same, you must include an explanation of the difference in your tax return. This should be the same as the inventory at the end of last year. Beginning inventory: This is the total cost of all the products in your inventory at the beginning of the year.You must include an explanation of any changes. Check with your tax preparer if you have changed your method of determining quantities, costs, or valuations. If you use the cash accounting method, you must value inventory at cost. Valuation method: Designate whether inventory is valued at cost, lower of cost or market, or other.
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