type
md-banner
background-image
background-image-mobile
title
Gross receipts tax services
subtitle
Address gross receipts tax exposure, compliance obligations and planning opportunities
highlight
green
buttons
breadcrumb
Gross receipts taxes are an increasingly important consideration for businesses operating across multiple states and jurisdictions. Unlike income-based taxes, these taxes are imposed on total revenue, which can significantly affect margins, compliance requirements and strategic decisions.
As organizations expand operations, introduce new offerings or acquire businesses, understanding where gross receipts tax exposure exists and how compliance obligations apply becomes critical. RSM helps companies assess taxability, quantify risk and implement practical planning and compliance strategies aligned to their operations.
What is a gross receipts tax?
A gross receipts tax is a tax imposed on a business’s total revenue generally without deductions for expenses.
Gross receipts vs. gross revenue and taxable income
- Gross receipts vs. gross revenue: These two terms are often used interchangeably, but gross receipts may include additional inflows such as interest or ancillary income depending on jurisdiction
- Gross receipts vs. taxable income: Taxable income reflects profit after deductions, while gross receipts taxes apply before expenses
Gross receipts tax vs. sales tax
- Sales tax is generally imposed on the end consumer and collected by the business
- Gross receipts tax is imposed directly on the business regardless of profitability or transaction type
How gross receipts tax works
- Tax on revenue, not profit: Businesses pay tax even when operating at a loss
- Tax pyramiding: The tax may apply at multiple stages of production or service delivery
- Variable rates: Rates differ by state, industry and revenue type
Where gross receipts taxes apply
- State-level: Certain states impose gross receipts-based taxes in place of or alongside income taxes, like the Washington Business and Occupation Tax or the Oregon Corporate Activity Tax
- Local jurisdictions: Counties, cities and municipalities may assess similar taxes on business activity, like the Virginia Business, Professional and Occupational Licenses tax or the San Francisco Gross Receipts Tax
- Quasi-gross receipts states: Some states impose gross receipts taxes that look and act similar to a sales tax, with higher rates and similar compliance obligations; these taxes often share some characteristics of both traditional gross receipts taxes and sales taxes (examples include the Hawaii General Excise Tax or the New Mexico Gross Receipts Tax)
Why partner with RSM for gross receipts tax services
RSM helps you assess how gross receipts taxes apply to your business, identify multistate exposure and clarify filing obligations to reduce risk.
Our team identifies practical planning opportunities to reduce tax exposure through revenue analysis, structuring and operational alignment.
Gross receipts tax services
Taxability and exposure assessments
We help determine how gross receipts taxes apply to your business by assessing taxability, reviewing revenue streams and identifying where exposure may exist across jurisdictions.
Exposure analysis and quantification
RSM analyzes revenue streams, determines taxable receipts and quantifies potential liabilities, helping prioritize risk areas and support decision making.
Voluntary disclosure agreement support
We assist with voluntary disclosure strategies to resolve historical liabilities, reduce penalties and limit lookback periods.
Compliance and outsourcing
RSM supports ongoing compliance, including return preparation, filing and process improvements to reduce administrative burden and improve accuracy.
Audit defense and controversy support
We provide audit support, documentation and technical analysis to help defend positions and minimize disruption during examinations.
Planning and structuring opportunities
RSM identifies opportunities to mitigate exposure through revenue classification, operational alignment and planning strategies tailored to your business model.
Frequently asked questions (FAQs)
How do I know if my business has gross receipts tax exposure?
Exposure depends on where you operate, generate revenue or establish economic nexus thresholds.
How is gross receipts tax applied in different states?
Application varies widely by jurisdiction, including differences in rates, exemptions and filing requirements.
What gross receipts tax exemptions exist?
Some jurisdictions provide exemptions or deductions based on industry, revenue type or transaction structure.
How does tax pyramiding create a gross receipts tax challenge?
Tax pyramiding can increase the effective tax burden because the same revenue may be taxed multiple times across the supply chain.
Section Title
Additional tax solutions
Section Subtitle
Layout
solution
Pages
- /services/business-tax/state-local-tax
- /services/business-tax/income-and-franchise-tax
- /services/business-tax/indirect-tax/domestic-indirect-tax
Cards per Row
3
Number of Rows
1
Order By
title
Sort Order
ascending
Show CTA Button
true
Override CTA Label
Load more
Carousel On Mobile
true
Carousel Swiper Text
Link Target
Same Tab