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No

Commissions involve 2 separate transactions both of which may be subject to gross receipts tax. The first is the sale of a product or service on which the seller must determine whether the sale is taxable. The second is the commission paid to the sales representative for facilitating the sale.

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Example: Multi-level marketing companies may collect and pay gross receipts tax. In such cases the commissions they pay are taxable.

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Important: If the sale of the product on which the commission is based is not taxable, then the commission is also not taxable. Note: This rule does not apply to commissions on the sale of services.

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It's important to remember that gross receipts that are deductible must reported and then deducted (subtracted) to get taxable gross receipts.

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Also read

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I earn commissions on sales on which the company I represent pays gross receipts tax. Isn't that tax collected twice?

The information provided in this website is for general informational purposes only. Readers should seek advice from a qualified attorney or tax professional regarding specific tax issues. Accessibilty Statement  Lawrence H. Hess CPA. All rights reserved.

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