![]() Gross receipts taxation is the practice of taxing all business sales, either without allowing deductions or only allowing for a few deductions. states have once again turned to the gross receipts tax, also known as the turnover tax, to generate the tax revenue they now lack on the corporate side. According to the Organization for Economic Co-operation and Development, though, the average corporate income tax rate across the 36 countries in its network dropped from 32.5 percent in the year 2000 to just 23.9 percent in 2018. ![]() Historically, small business income and receipts tax didn't even live in the same world, as state governments raised more money by focusing on the taxation of corporate income. Nowadays, it's hard to have a conversation about gross receipts without talking about the gross receipts tax. It extends to other payments received, like rent paid in advance, payments from a rent-to-own contract, rent penalties, late fees you charged your tenants or security deposits you received – all of these types of payments are defined by the IRS as rent paid. However, this gross amount may include more than just regular monthly rent payments. So it's just the gross amount of money you receive from your tenants without subtracting any of the expenses you pay as a landlord. For landlords, gross receipts are the total of all monies you receive from tenants paying for space, plus payments for utilities and other services you provide. When it comes to rental properties, the definition of gross receipts changes just a little bit. That sounds like a pretty wide net, but some things don't count toward gross receipts, such as the proceeds of a loan repayment or engaging in the exchange of stock for property. ![]() Gross receipts for any taxable year must include monetary amounts received from selling or leasing property over the course of your business operations as well as any income garnered from providing services, plus dividends, interest and commission transactions.
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