Gross receipts tax
A state tax measured on a business's total revenue rather than its profit, owed even by businesses that lose money.
A gross receipts tax is charged on what a business takes in, before costs. Because it ignores expenses, it falls hardest on low-margin businesses. A reseller with thin margins can owe it in a year it loses money.
A few states use one in place of, or alongside, a corporate income tax:
- Washington's business and occupation tax is figured on the total value of products sold or the total income the business earns, at rates that depend on the activity.
- Oregon's corporate activity tax is $250 plus 0.57% of taxable Oregon commercial activity over $1 million.
- Nevada's commerce tax applies to businesses with Nevada gross revenue over $4 million a fiscal year.
- Ohio's commercial activity tax applies above an exclusion amount, $6 million from 2025.
Most of these apply to every structure, including sole proprietorships, so choosing an LLC or S corp doesn't avoid them. Many cities also charge their own gross receipts or business taxes, which StructureCost doesn't model.