How is the occupation tax paid?
The business pays the occupation tax directly to the city on forms provided by the city. Depending on the ordinance or resolution enacted by the city, a retailer may: • Choose to itemize the occupation tax by showing it on the customer’s bill; • Choose to absorb the occupation tax; or • Raise prices to recoup the occupation tax without separately itemizing it on the customer’s bill. When is the occupation tax subject to state or local sales taxes? If a retailer selling items or services subject to sales tax chooses to show the occupation tax on the customer’s bill, the occupation tax is part of gross receipts. In this case, the occupation tax must be included in the sales price before calculating the state and any applicable local sales tax. A business is not allowed to combine the occupation tax rate with the sales or lodging tax rate and charge its customers one flat rate. Why is this not considered “a tax on a tax?” Collecting sales tax on the occupation tax is not considered a “tax
Related Questions
- What is the CRA.s policy towards taxpayers who have not paid their taxes owed to the government by the tax deadline?
- How should one treat the closing stock for which tax is not paid as till now tax was being paid only on sale?
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