We reported gross revenues correctly on our gross revenue license, but we still owe additional fees. How is that possible?
The semi-annual license fee is paid in advance and is based on the gross sales/receipts of the business. The standard fee payment represents a prepayment of fees based on estimated sales/receipts for the upcoming license period. At every license renewal, the six-month license renewal fee for the next period (the “in advance” period) is calculated based upon the “prior” six-month’s gross sales/receipts. Thus, during an audit, if the actual sales in that license period are greater than the amount the licensee estimated, an additional fee may be assessed based on the difference. On the other hand, if the estimated sales were greater than the actual sales, a refund of fee may be issued. For additional information, see the following memo issued by Department describing this matter in greater detail.
