Gross Receipts Tax Law

The Gross Receipts Tax Law is a type of tax that businesses pay based on their total revenue, rather than their profits. Unlike traditional sales tax, which is charged to consumers on specific sales, this tax applies to all income a business receives from sales or services. It is often used by state and local governments as a simpler way to generate revenue. Since it doesn’t consider expenses, gross receipts taxes can have a greater impact on businesses with lower profit margins, making it an important consideration in local and state tax systems.