Articles Posted in Gross Receipts Tax


(This article originally was published by Law360 on July 22, 2019.)

On July 5, the San Francisco Superior Court issued a pair of rulings in favor of the city and county of San Francisco, finding that two local special taxes introduced by voter initiatives were valid even though they passed with a simple majority vote and not a two-thirds supermajority vote.

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gross-receipt-taxes-portlandAs of January 1, 2019, large retailers doing business in Portland, Ore., are subject to a new 1% gross receipts tax dubbed the “Clean Energy Surcharge.” This new tax is imposed on all businesses subject to the Portland business license tax that have annual retail receipts of over $1 billion and at least $500,000 annual retail receipts attributable to Portland. This tax has complications that qualifying large retailers should keep in mind. For instance, the tax is unconventionally broad and applies to, among other things, services (generally, without enumeration), interest income from lending, and sales of houses by builders. The tax uses current-year receipts, as opposed to prior-year receipts, to determine whether the thresholds are met, so businesses that may not be sure in advance if they will meet the thresholds should take caution accordingly. Finally, as is often the case with localities, Portland intends to apply its business license tax apportionment rule (income-producing activity approach), which differs from that of the State (market-based sourcing).


The majority of states impose a form of a corporate income tax. However, currently five states—Delaware, Ohio, Nevada, Texas and Washington—impose a broad-based, statewide corporate gross receipts tax. The most recent addition to that list is Nevada, which in its 2015 Legislative Session enacted a new Commerce Tax that is imposed on gross revenue. More recently, there have been and are, at the time of writing, ongoing efforts in Oregon to enact a corporate gross receipts tax, either as a separate tax or as an alternative tax to the existing Oregon corporate income/excise tax. Even more recently, both West Virginia and Louisiana have considered a gross receipts tax.

(The remainder of this article can be access in the July 2017 edition of the Journal of Multistate Taxation and Incentives.)