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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.

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

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.

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

Also read

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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