Gross Receipts Tax

Regardless of profitability and without accounting for business expenses, gross receipts taxes (GRTs) is levied on a company’s gross sales. This is a significant distinction from other taxes that companies must pay, such as those that are calculated according to net income or profits, such as a corporate income tax, or according to ultimate consumption, such as a properly designed sales tax.

Every step of the manufacturing process is hit with GRTs, which leads to a phenomenon known as “tax pyramiding,” in which the tax burden increases and is ultimately passed on to consumers.

Businesses with extended supply chains and startups, that experience losses in their initial years of operation, are severely harmed by GRTs. Despite being disregarded for years as an ineffective and bad tax policy, authorities have recently started to take GRTs into account once more as they look for new income sources.

The tax laws are very complex. Our short blog articles cannot cover in full all the nuances of the rules. Your specific facts may hold various opportunities and possible risks that only trained, experienced, and highly qualified tax specialists can spot. We encourage you to find such help, rather than trying to figure it all out on your own. Consider giving this marketplace a try by posting your project and signing up here.

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