So essentially they are saying “gross receipts” is not actually gross receipts in the traditional sense of the term and is actually gross receipts less COGS.ĭo any of you have an interpretation of this or thoughts on how you believe it is appropriate to present or handle this on applications?Īppreciate any and all insights as I am trying to handle this for a client first thing in the AM. What I don’t understand here is they appear to be including COGS in this calculation. All other items, such as subcontractor costs, reimbursements for purchases a contractor makes at a customer's request, investment income, and employee-based costs such as payroll taxes, may not be excluded from gross receipts.” Includes gross receipts from customers or clients. Gross receipts do not include the following: taxes collected for and remitted to a taxing authority if included in gross or total income (such as sales or other taxes collected from customers and excluding taxes levied on the concern or its employees) proceeds from transactions between a concern and its domestic or foreign affiliates and amounts collected for another by a travel agent, real estate agent, advertising agent, conference management service provider, freight forwarder or customs broker. Receipts (basic dollar volume measure for service establishments of firms subject to federal income tax). Generally, receipts are considered “total income” (or in the case of a sole proprietorship, independent contractor, or self-employed individual “gross income”) plus “cost of goods sold,” and excludes net capital gains or losses as these terms are defined and reported on IRS tax return forms. “Gross receipts includes all revenue in whatever form received or accrued (in accordance with the entity’s accounting method) from whatever source, including from the sales of products or services, interest, dividends, rents, royalties, fees, or commissions, reduced by returns and allowances. The definition is on page 22 about halfway down on the line starting with (2)(i): Commission earned from Advertising agency was to be Turnover and not the entire value of service.Sale on principal to principal basis: Gas Cylinders Agency, the agreement clearly indicated that the appellant was appointed as a distributor on principal to principal basis for sale of gas cylinders to consumers. Not only is the tax inequitable, but it is also inefficient and distortionary. The economic harms of the gross receipts tax (GRT) were well understood by the early 20th century. However, in reading through the IFR on PPP2, the SBA defines gross receipts as income less COGS. Examples on Meaning of Turnover Or Gross Receipts. Generally, receipts are considered total income (or in the case of a sole proprietorship, independent contractor, or self-employed individual gross income) plus cost of goods sold, and excludes net capital gains or losses as these terms are defined and reported on IRS tax return forms. Massachusetts Should Reject Gross Receipts Taxes. To most anyone (I would assume), gross receipts means income aka only money coming in.
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