![]() (These limited taxes, however, have far less potential for harmful tax pyramiding, and are closer to functioning as ad valorem excise taxes.) Gross receipts taxes also exist at the municipal and county levels. Nearly all states use gross receipts as a tax base in some context, most commonly for utility and energy companies. ![]() Their appeal comes as many states are looking to replace revenue lost by eroding corporate income tax bases and as a way to limit revenue volatility. Gross Receipts Taxes have returned as a revenue option for policymakers after being dismissed for decades as inefficient and unsound tax policy. ![]() By the late 1970s, however, gross receipts taxes began to be repealed or struck down as unconstitutional by state courts. Gross receipts taxes spread during the 1930s, as the Great Depression reduced state property and income tax revenue. In America, the first gross receipts tax was established in 1921 by West Virginia as a “business and occupations privilege” tax. The methods of calculating the annual gross volume of sales of an enterprise are set forth in §§ 779.265 through on gross receipts originated in Europe as early as the 13th century but were later replaced with value-added taxes, which are more stable, more transparent, and less economically harmful. The taxes which may be excluded are discussed in §§ 779.261 through 779.264. The computation of the annual gross volume of sales or business of the enterprise is made “exclusive of excise taxes at the retail level which are separately stated”. ![]() However, the dollar volume of an establishment derived from transactions with other establishments in the same enterprise does not ordinarily constitute part of the annual gross volume of the enterprise as a whole. The fact that one or more of the retail or service establishments of the enterprise may have less than $250,000 in annual dollar volume and may meet the other requirements for exemption from the pay provisions of the Act under section 13(a)(2), does not exclude the dollar volume of sales or business of that establishment from the annual gross volume of the enterprise. The dollar value of sales or business of the entire enterprise in all establishments is added together to determine whether the applicable dollar test is met. It is not measured by profit on goods sold or commissions on sales made for others. Gross volume is measured by the price paid by the purchaser for the property or service sold to him, as stated in the Senate Committee Report ( § 779.258). The gross volume of sales or business includes the receipts from sales made or business done by the retail or service establishments of the enterprise as well as the sales made or business done by any other establishments of the enterprise, exclusive of the internal transactions between them. Credits for goods returned or exchanged and rebates and discounts, and the like, are not ordinarly included in the annual gross volume of sales or business. The gross volume of sales made or business done means the gross dollar volume (not limited to income) derived from all sales and business transactions including, for example, gross receipts from service, credit, or other similar charges. (a ) The annual gross volume of sales made or business done of an enterprise consists of its gross receipts from all types of sales made and business done during a 12-month period.
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