Gross Receipts Taxes deductible?


G

Grip

I have another post up about a personal situation I'm having with
Gross Receipts Taxes and that got me thinking about GRT in general.

Are GRT taxes paid by a consumer deductible on a personal Federal
return as sales taxes are?

GRT, theoretically, is a tax on the seller, not the purchaser.
Technically New Mexicans don't pay sales tax.

========================================= MODERATOR'S COMMENT:
Please make it more obvious next time that you are asking about NM
taxes. Thank you
 
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A

Alan

I have another post up about a personal situation I'm having with
Gross Receipts Taxes and that got me thinking about GRT in general.

Are GRT taxes paid by a consumer deductible on a personal Federal
return as sales taxes are?

GRT, theoretically, is a tax on the seller, not the purchaser.
Technically New Mexicans don't pay sales tax.

========================================= MODERATOR'S COMMENT:
Please make it more obvious next time that you are asking about NM
taxes. Thank you
Yes, the amount of GRT paid by a consumer counts as sales taxes for
purposes of Form 1040 Schedule A or if you met the requirement for the
new car purchase in 2009, you could have added the GRT (3% of purchase
price) you paid on the qualifying vehicle to the standard deduction if
you didn't itemize.
 
S

scott s.

Yes, the amount of GRT paid by a consumer counts as sales taxes for
purposes of Form 1040 Schedule A or if you met the requirement for the
new car purchase in 2009, you could have added the GRT (3% of purchase
price) you paid on the qualifying vehicle to the standard deduction if
you didn't itemize.
Here in Hawaii, I think the rule is that if you elect to deduct "sales
tax" (though the Individual Income Tax is plenty high) you can deduct
the Gross Excise Tax, provided it is itemized on a receipt or other
evidence of sale. Sellers are not required to break out the portion
of a sales price that represents the GET, but retail and many service
providers do I suppose for competitive reasons (advertised prices
typically do not include the GET). The state awarded a contract to
a company to ferret out GET non-filers for a percentage of the take
and has been successful at getting some returns that way. A few have
been referred for criminal charges (seeme like real estate agents'
commissions have been fertile ground among others).

Also, the GET is not "theoretically" a tax on seller, it literally is.
This has been an issue in Hawaii as the gov't was trying to advance
a legal theory that sellers had a "trust" repsonsibility for amounts
of GET. That theory hasn't been tried out in a court yet as I suspect
the state realizes it is a stretch.

scott s.
...
 
D

Dan Lanciani

| Here in Hawaii, I think the rule is that if you elect to deduct "sales
| tax" (though the Individual Income Tax is plenty high) you can deduct
| the Gross Excise Tax, provided it is itemized on a receipt or other
| evidence of sale. Sellers are not required to break out the portion
| of a sales price that represents the GET, but retail and many service
| providers do I suppose for competitive reasons (advertised prices
| typically do not include the GET). The state awarded a contract to
| a company to ferret out GET non-filers for a percentage of the take
| and has been successful at getting some returns that way. A few have
| been referred for criminal charges (seeme like real estate agents'
| commissions have been fertile ground among others).
|
| Also, the GET is not "theoretically" a tax on seller, it literally is.

Does the GET apply to interstate transactions?

Dan Lanciani
[email protected]*com
 
S

scott s.

[email protected]*com (Dan Lanciani) wrote in
Does the GET apply to interstate transactions?
Goods and services exported from Hawaii are exempt from GET. Goods
and services imported are subject to the use tax, which I think works
the same as in sales tax jurisdictions. Imported goods and services
incorporated into goods intended for resale (wholesale) are not
subject to use tax. Note that wholesale transactions in Hawaii are
subject to GET, but at a reduced rate. This use tax exemption does
not cover overhead, so for example using a mainland payroll service
would result in a use tax liability.

scott s.
...
 
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T

Tom Healy CPA

I have another post up about a personal situation I'm having with
Gross Receipts Taxes and that got me thinking about GRT in general.

Are GRT taxes paid by a consumer deductible on a personal Federal
return as sales taxes are?

GRT, theoretically, is a tax on the seller, not the purchaser.
Technically New Mexicans don't pay sales tax.

========================================= MODERATOR'S COMMENT:
Please make it more obvious next time that you are asking about NM
taxes. Thank you
Unless you billed the GRT as part of your invoice to your client, in
which case the net cost for your business would approximate zero, the
CRT would be a business deduction on Schedule C, not a miscellaneous
itemized deduction. Penalties due to late payment of course, wouldn't
be deductible. It's similar to Use Tax, which you either deduct
separately, or more properly, include in the cost of the item when you
buy it, even though you pay it separately to the state or locality.
 
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