Which States Have Gross Receipts Tax?

by | Jan 23, 2020

Summary: There are multiple states with gross receipts tax: Delaware, Nevada, Ohio, Oregon, Tennessee, Texas, and Washington. Business owners should be aware of the gross receipts tax requirements in these states and to take action to prevent liabilities from accumulating over time.  

Gross receipts tax is a tax that is applied to the total gross revenue of a business. Unlike sales tax, gross receipts tax is generally paid by the business, not by the consumer.

Frequently, businesses overlook gross receipts tax or assume that the liabilities will be taken care of automatically with their sales tax return. This is dangerous because often time the states’ Statute of Limitations only apply to sales tax and not to Gross receipts Tax.

Thankfully, only a few states have Gross Receipts Tax and of those that do, the rates are relatively low. If you have a sizable business and are not paying Gross Receipts Tax in any states, you should consider working with us so we can take care of it all for you.

See the table below for detailed information regarding gross receipts tax in specific states. 

 

Local and City Gross Receipts Taxes

Local governments have also been creating gross receipts taxes in order to boost revenues. We are aware of the following cities with local gross receipts taxes:

  • Los Angeles (in California) has a business license tax which is based on gross receipts attributable to Los Angeles. You can learn more about Los Angeles’s gross receipts tax here.
  • San Francisco (in California) has a gross receipts tax on businesses with more than $1,170,000 in combined taxable San Francisco gross receipts OR more than $320,000 in taxable San Francisco payroll expenses. You can learn more about San Francisco’s gross receipts tax here.
  • Philadelphia (in Pennsylvania) has a gross receipts tax referred to as the Business Income and Receipts Tax (BIRT). You can learn more about Philadelphia’s gross receipts tax here.
  • Portland (in Oregon) has a gross receipts tax on businesses over $1 billion in total sales with at least $500,000 annual retail receipts attributable to Portland. 
  • Certain Washington Cities. Some cities impose a B+O tax that is not collected by the state of Washington. You can find a list of cities that self-collect their Business and Occupation tax by clicking here.

    TaxValet will not automatically handle local and city gross receipts taxes on your behalf unless specifically requested and agreed upon.

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How to Pay Delaware’s Gross Receipts Tax

Summary: Any company that is “engaged in business” in Delaware must file and pay Delaware Gross Receipt Tax. The tax rate used is based on your business category but generally ranges from 0.09% to 0.75%.
 

Question Answer

Who has to file/pay Delaware Gross Receipts Tax?

Any company that is “engaged in business” in Delaware must have a business license and pay Gross Receipts Tax. At the time of this blog article, if your company does not have a physical presence within the state and are simply mailing orders to customers in Delaware, then you would not need to pay Delaware Gross Receipts Tax. Additional exclusions might apply if you simply send a delivery vehicle or sales representative(s) into Delaware. 

How do you register for Delaware Gross Receipts Tax?

To pay Delaware Gross Receipts Tax, your business must be licensed in the state of Delaware. You can do that on the Delaware One Stop homepage.

How is Delaware Gross Receipts Tax calculated?

Delaware’s Gross Receipts Tax rates currently range from 0.0945% to 0.7468% depending on the type of business. To determine the gross receipts tax rate for a specific business activity in Delaware, please you can look up your business activity using this page. Pay special attention to which NAICS code you use during business license registration as this will determine what your tax rate will be.

Where is the form for Delaware Gross Receipts Tax?

You can file the Delaware Gross Receipts Tax form online or print and mail a paper form with a check. 

When is Delaware Gross Receipts Tax due?

Delaware Gross Receipts Tax returns and payments are due either monthly or quarterly, depending on a business’s total gross receipts. If you are a monthly filer, the gross receipts tax is due on or before the 20th day of each month. If you are a quarterly filer, then your gross receipts tax is due on or before the last day of the first month following the close of the quarter.

Where can I go for more information on Delaware Gross Receipts Tax?

You can learn more on the Delaware Gross Receipts Tax FAQ page or by contacting their help group at (302) 577-8780.

Does TaxValet handle Delaware Gross Receipts Tax?

✅ TaxValet can file and pay Delaware’s Gross Receipt Tax on your behalf with your instruction and approval.

How to Pay Nevada Commerce Tax (Gross Receipts Tax)

Summary: All businesses whose gross Nevada revenues exceed $4,000,000 are required to file a Nevada Gross Receipts Tax (Commerce Tax) return annually. The amount of tax used is based on your business category but is usually ranges from 0.05% and 0.3%.
 

Question Answer

Who has to file/pay the Nevada Commerce Tax?

All businesses whose Nevada gross revenues in a taxable year exceed $4,000,000 are required to file the Nevada Commerce Tax return. Certain entities, such as non-profits, are exempt (see this page for more information).

How do you register for the Nevada Commerce Tax?

To register for the Nevada Commerce Tax you must fill out a Nevada Nexus Questionnaire and mail it to the Nevada Department of Taxation.

How is the Nevada Commerce Tax calculated?

Nevada’s Commerce Tax rate varies based on what business category you fall under, but it is generally between 0.05% and 0.3%, with a 0.111% tax rate for retail trade. When registering for the Nevada Commerce Tax, pay special attention to what NAICS code you use as this will impact the rate you pay. 

Where is the form for the Nevada Commerce Tax?

The Nevada Commerce Tax return form can be found on the Nevada Department of Taxation’s website.

When is the Nevada Commerce Tax due?

Nevada’s Commerce Tax return is due 45 days following the end of the fiscal year (June 30). If the 45th day falls on a weekend or holiday, the return is due on the next business day.

Where can I go for more information on the Nevada Commerce Tax?

For more information on the Nevada Commerce Tax, check out their overview page or their FAQ page. 

Does TaxValet handle the Nevada Commerce Tax?

✅ TaxValet can file and pay Nevada’s Commerce Tax (Gross Receipt Tax) with your instruction and approval. 

 

Get Help with Your Gross Receipts Tax Filings

Let our team of professionals help you determine where you have nexus and file your returns with our Done-for-You Service.

How to Pay Ohio Commercial Activity (CAT) Tax (Gross Receipts Tax)

Summary: Businesses with $150,000 or more in revenues attributable to Ohio are responsible for paying Ohio Gross Receipts Tax (Commercial Activity Tax) either annually or quarterly. The first $1,000,000 in taxable gross receipts are taxed at $150 (minimum tax due) and any gross receipts above that are taxed at 0.26%.

 

Question Answer

Who has to file/pay Ohio Commercial Activity Tax?

Ohio’s Commercial Activity Tax (CAT) applies to most businesses including retail, wholesale, service, manufacturing, and other businesses regardless of the formation type. This includes sole proprietorships, LLCs, S corporations, corporations, disregarded entities, trusts, and all other types of businesses. 

You must pay Ohio’s gross receipts tax if you either:

1. Are based in Ohio with taxable gross receipts of more than $150,000 in a calendar year OR

2. Have crossed the “bright line” in Ohio. You have crossed Ohio’s “bright line” in Ohio if any of the following are true:

  • You have an aggregate of at least $50,000 in property for a calendar year. 
  • You have at least $50,000 in payroll in the state in a calendar year. 
  • You have at least $500,000 in gross receipts in Ohio
  • You have at any time during the calendar year at least 25% of the person’s (or company’s) total property, payroll, or gross receipts in Ohio
  • You are domiciled in the state as an individual or fore corporate, commercial, or other business purposes. 

 

Some businesses, such as non-profit organizations, are not subject to the Ohio Commercial Activity Tax. For a list of who is not subject to the CAT please see this page on Ohio’s site. 

How do you register for Ohio Commercial Activity Tax?

In order to file returns, you must register for the CAT with the Department of Taxation. This can be done electronically through the Ohio Business Gateway. A paper registration application is also available on Ohio’s Forms page.

How is Ohio Commercial Activity Tax calculated?

For calendar years 2006 and later, the first $1,000,000 in taxable gross receipts are taxed at $150 (the minimum tax due). At the time of writing this blog post, any taxable gross receipts above $1,000,000 are taxed at 0.26%. You can find an updated list of tax rates on this page

Where is the form for Ohio Commercial Activity Tax?

The Ohio Commercial Activity tax must be paid electronically through the Ohio Business Gateway. Alternatively, annual taxpayers may utilize TeleFile as a means for filing and paying the annual CAT return electronically.

When is Ohio Commercial Activity Tax due?

If you make between $150,000 and $1,000,000 in Ohio gross receipts then the tax is due on May 10th. 

If you make in excess of $1,000,000 in Ohio gross receipts you must pay returns on a quarterly basis which corresponds to either May 10th, August 10th, November 10th, or February 10th.

You can find more details on due dates for the Ohio Commercial Activity Tax on this page

Where can I go for more information on Ohio Commercial Activity Tax?

For more information on Ohio’s Commercial Activity Tax check out their FAQ page or their CAT Overview Page.

Does TaxValet handle Ohio Commercial Activity Tax?

✅ TaxValet can file and pay Ohio Commercial Activity Tax (Gross Receipt Tax) on with your instruction and approval.  

How to Pay Oregon’s Corporate Activity Tax (Gross Receipts Tax)

Summary: Any business that has over $750,000 in Oregon commercial activity must register to pay the CAT, and any business with over $1 Million in Oregon commercial activity must file and pay the CAT. The amount due is based on sales in excess of $1 Million.
 

Question Answer

Who has to file/pay Oregon Corporate Activity (CAT) Tax?

Any business, or unitary group of businesses, doing business in Oregon may have responsibilities under the CAT. This includes all business entity types, such as C and S corporations, partnerships, sole proprietorships, and other entities. 

The CAT sets four thresholds to determine whether a business or unitary group has CAT responsibilities. These thresholds are based on the amount of commercial activity the business or unitary group earns in Oregon over the course of the year

  • Less than $750,000 in Sales: No Requirement. ​Businesses or unitary groups with less than $750,000 of Oregon commercial activity are excluded from all CAT requirements.
  • $750,000+: Registration Threshold. ​Businesses or unitary groups with Oregon commercial activity in excess of $750,000 must register for the CAT.
  • $1 Million: Filing Threshold. Businesses or unitary groups with Oregon commercial activity of $1 million must file a return.
  • More than $1 Million: Tax Payment Threshold. Businesses or unitary groups with taxable Oregon commercial activity in excess of $1 million must file a return and pay tax.​

Registration is due within 30 days of meeting the $750,000 registration threshold. A penalty of $100 per month may be assessed for failing to register, up to $1,000 per calendar year.

How do you register for Oregon Corporate Activity (CAT) Tax?

You can register for Oregon Corporate Activity Tax at Oregon Revenue Online.

How is Oregon Corporate Activity (CAT) Tax calculated?

The CAT is applied to Oregon taxable commercial activity in excess of $1 million. The tax is computed as $250 plus 0.57% of Oregon commercial activity of more than $1 million. Only taxpayers with more than $1 million of taxable Oregon commercial activity will have a payment obligation.

The following exclusions may apply to Oregon Corporate Activity Tax:

A taxpayer expecting more than $5,000 of Corporate Activity Tax liability for the calendar year must make estimated payments. CAT liability of $5,000 for the year corresponds with taxable commercial activity equal to $1,833,245.

You can read two examples for how to calculate the Oregon CAT by clicking here.

Where is the form for Oregon Corporate Activity (CAT) Tax?

You can pay for Oregon Corporate Activity Tax on Oregon Revenue Online.

In addition, you can pay your estimated taxes by using one of the following options: 

By ACH Credit. You can submit your application by going to Revenue Online and clicking on Apply for ACH credit.

When is Oregon Corporate Activity (CAT) Tax due?

A taxpayer expecting $5,000 or less of CAT liability for a calendar year doesn’t need to make estimated payments but still must file an annual return and pay CAT liability no later than April 15 of the following calendar year.

Estimated payments are due April 30, July 31, October 31, and January 31 for the preceding calendar quarter.

Where can I go for more information on Oregon Corporate Activity (CAT) Tax?

You can learn more about Oregon Corporate Activity Tax on the Oregon Corporate Activity Tax page or by visiting their Basic FAQ page and Extended FAQ page.

Does TaxValet handle Oregon Corporate Activity (CAT) Tax?

✅ TaxValet can file and pay your Oregon Corporate Activity Tax with your instruction and approval.

How to File and Pay Tennessee’s Business Tax (Gross Receipts Tax)

 

Question Answer

Who has to file/pay Tennessee Business Tax?

All businesses generally must pay Tennessee business tax if they make more than $10,000 in sales into any Tennessee county and have substantial nexus in the state. This includes businesses with a physical location in the state as well as out-of-state businesses performing certain activities in the state.

Also, if you have a physical location where you conduct business in a city that has enacted a business tax, then you must pay the city business tax as well. Under these circumstances, you must file two separate tax returns.

For out-of-state businesses that are not contractors:  If you are an out-of-state taxpayer with substantial nexus to Tennessee and engaged in this state for business tax purposes, you must register with the department and remit business tax on any gross receipts from sales of $10,000 or more annually in any county in Tennessee. You do not need a local business license issued by a county.

Taxpayers who enter Tennessee to conduct business activities but who do not have a physical business location in Tennessee and who generate gross sales of $10,000 or more in any Tennessee county must file one state business tax return for the gross receipts received in counties where gross receipts were $10,000 or more.

For in-state businesses:  If your in-state location has gross receipts of more than $3,000 but less than $10,000, you must obtain a minimal activity license from your county and/or municipal clerk.   A standard business license is needed from your county and/or municipal clerk if your gross receipts are $10,000 or more.  You are not allowed to operate until your required license is obtained and posted in your business’ location.

How do you register for Tennessee Business Tax?

You can register for Tennessee’s Business Tax electronically using the Tennessee Taxpayer Access Point (TNTAP).

How is Tennessee’s Business Tax calculated?

The amount of Tennesee Business Tax you pay is based on the classification of your business. 

To determine which business classification you should use, check out Tennessee’s Business Tax Classification guide (note: most retail businesses will fall under Classification 2). 

An updated list of rates is provided on Tennessee’s Business Tax Page. In general, rates vary from 0.03% to 0.1875%.

Where is the form for Tennessee Business Tax?

You can file and pay Tennessee’s Business Tax via a paper form located here or through Tennessee’s Online Portal (TNTAP).

When is Tennessee Business Tax due?

Your business tax return is due on the 15th day of the fourth month following the end of your fiscal year.  For example, if your fiscal year coincides with the calendar year, then your return will be due on April 15.

Where can I go for more information on Tennessee Business Tax?

You can learn more about Tennessee’s Business Tax on the Tennessee Business Tax homepage.

Tennessee’s complete Business Tax Guide can be found here.

Does TaxValet handle Tennesse Business Tax?

✅ TaxValet will file and pay your Tennessee Business Tax if you elect for us to do so.

How to Pay Texas Franchise Tax (Gross Receipts Tax)

Summary: All companies that have nexus or are registered in Texas must pay Texas Gross Receipts Tax (Franchise Tax) annually. The tax due is calculated based on the margins on the revenue that can be attributed to Texas.
 

Question Answer

Who has to file/pay Texas Franchise Tax?

Generally speaking, all companies that are registered in Texas, or have nexus in Texas must file a franchise tax return annually. This includes companies that meet Texas’s economic nexus thresholds

 

Eligible entity types include corporations, LLCs, banks, S-corporations, professional corporations, partnerships, trusts, professional associations, business associations, joint ventures, and other legal entities. You can see a full list of qualifying business types on Texas’s Franchise tax Overview page.

You can determine if your company is accountable for Texas Franchise Tax by completing Texas’s online accountability questionnaire.

How do you register for Texas Franchise Tax?

You register for Texas Franchise Tax automatically when you register your business with the state. This typically happens automatically when registering for a sales tax permit or by registering with the Secretary of State.

How is Texas Franchise Tax calculated?

The amount of Texas Franchise Tax due is based on the margins on revenue that can be attributed to Texas. You can use the Texas Franchise Tax Calculator to determine how much you should pay. Please note that this is similar to, but not technically, an income tax.

If your annualized revenue is $1,180,000 or less, or you owe less than $1,000, then you will owe no tax.  

If your annualized total revenue is $20,000,000 or less, you are eligible to use the EZ computation which is taking your total revenue, apportioning the revenue to Texas, and multiplying that by the tax rate. As of the time of this blog post, the tax rate is $0.375%, but you can see updated rates here. You should consider if it is more beneficial to use the EZ computation or to calculate your own margins.

Where is the form for Texas Franchise Tax?

You can find the form for Texas Franchise Tax on the Texas Forms Page.

When is Texas Franchise Tax due?

Texas Franchise Tax reports are due on May 15th each year. If May 15th falls on a weekend or legal holiday, then the next business day becomes the due date. 

The Comptroller’s office will tentatively grant an extension of time to file a franchise tax report if a request is made before the due date of the original report. 

Where can I go for more information on Texas Franchise Tax?

You can learn more information on Texas’s Franchise Tax Website and on the Texas Franchise Tax FAQ page.

Does TaxValet handle Texas Franchise Tax?

⛔ TaxValet can work with your bookkeeper, accountant, or CPA to provide information so they can calculate the tax due. You or your accountant or CPA will be responsible for filing and paying the tax.

How to Pay Washington’s Business and Occupation (B&O) Tax (Gross Receipts Tax)

 

Summary: Any business that is required to pay taxes or fees to the Washington Department of Revenue or whose gross income is $12,000 per year or more are required to pay Washington Gross Receipts Tax (Business & Occupation Tax). The amount you pay varies based on your business classification.
Question Answer

Who has to file/pay Washington Business and Occupation Tax?

Businesses must register with the Washington Department of Revenue to pay Washington B&O tax if the business meets any of the following:

  • Your business is required to collect sales tax
  • Your gross income is $12,000 per year or more
  • Your business is required to pay taxes or fees to the Department of Revenue
  • You are a buyer or processor of specialty wood products

How do you register for Washington Business and Occupation Tax?

You can register for Washington Business and Occupation Tax by using MY DOR. For additional registration information, you can visit the Register My Business page on Washington’s site.

How is Washington Business and Occupation Tax calculated?

Washington’s Business and Occupation (B&O) tax rate varies based on your business classification. You can view Washington’s B&O tax rates by clicking here. If you are not sure which business classification you fall under you can find more information on Washington’s tax classifications for common business activities page or their list of tax classification definitions. There are no deductions from the B&O tax for labor, materials, taxes, or other costs of doing business.

Where is the form for Washington Business and Occupation Tax?

Washington’s B&O Tax can be paid electronically through MY DOR.

When is Washington Business and Occupation Tax due?

Washington’s B&O tax is reported and paid on the excise tax return or by filing electronically. You will receive information about your filing frequency once you have registered with Washington.

If you are a monthly filer, then the Washington B&O tax is due on the 25th of the following month.

If you are a quarterly filer, then the Washington B&O tax is due by the end of the month following the close of the quarter.

If you are an annual filer, then the Washington B&O tax is due on April 15th.

Where can I go for more information on Washington Business and Occupation Tax?

You can learn more about Washington B&O Tax on this Washington Department of Revenue page or by visiting their FAQ page.

Does TaxValet handle Washington Business and Occupation Tax?

✅ TaxValet can file and pay your Washington B&O Tax when we file your Washington sales tax returns.  Click here to start the process of becoming a TaxValet client.

 

Disclaimer: Our attorney wanted you to know that no financial, tax, legal advice or opinion is given through this post. All information provided is general in nature and may not apply to your specific situation and is intended for informational and educational purposes only. Information is provided “as is” and without warranty.

1 Comment

  1. ExoRank.com

    Awesome post! Keep up the great work! 🙂

    Reply

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