Thank you for your question
According to the center for tax and budget accountability,
What is a Gross Receipts Tax?
A Gross Receipts Tax (GRT) is a broad-based, low rate (generally less than 1%) tax imposed on
all income received by a business with out any deductions for costs of doing business , such as as deduction for wages. GRTs are not based on a company’s profit or loss for a given tax year; rather, they are owed on all income, regardless of whether or not business is profitable.
Currently, seven states impose a GRT: Delaware, Kentucky, Michigan, New Mexico, Ohio, Texas and Washington.
How is the GRT Different from the Corporate Income
Unlike the corporate income tax which is levied on a corporation’s profits, the GRT is imposed on the
gross receipts or, the total sales, of all goods and services each time they change hands in the distribution chain.
The GRT is a stable revenue source because all firms, even unprofitable ones, pay some tax, which
results in more revenue for the state. Estimates show that a 1-2% GRT would generate roughly $6 billion for Illinois.
In the few states that have a GRT, the rate is typically lower than a corporate income tax rate due to
the much larger tax base.
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Hello, I see you're here now
I still do not know which amount should I take from and Annual Report "Payments to government". Can I take income tax as a proxy for GRT? If yes, which accrual or on a cash basis?
where are you located?
well, I revise the Annual Reports of companies published worldwide.
let me check something
also one comment, I thought the term gross taxes means the sum of current and deferred taxes - as reported in the income statement
I want to be sure we're on the same page here..............do you have a form number that you can give me?
the form you need to file
could you please clarify which Form? I just revise the Financials of copamnies. For example take the Annual Report of the company Severstal: pages 120 for income tax expense and page 123 for income tax paid. I am sinding you the attachment.
Ok..........I'll let you know when I get it
It seems the file is too large - it did not work but here is the link: http://www.severstal.com/eng/index.phtml you can download and revise the 2012 Annual Report.
Ok.....let me check one more thing..........and then I think we will have the right answer
ok...the term "gross taxes" in whatever form, report, etc, that you file is obviously NOT the same as "Gross Receipts Tax"........in this case I would use the "payments to government"
and which value from the Annual Report should I take for "Payments to government"?
Since I can't see the paperwork, I would think that they would have itemized the type of tax paid
is this correct?
I mean where payments to government are reported in the Annual Reports of companies? Income statement as tax expense of Cash flow as tax paid? This is the same in any income statement of statement of cash flows
I mean if you would have to look in an Annual Report of a company x for the value of "Payments to government", where is this value reported? In the income statement as tax expense OR in the Statement of Cash flows as tax paid?
ok.........I think we're finally on the same page
give me just one more minute please
use tax expense
could you please explain why? and why not the tax paid? thanks
gross tax is the amount due........which may or may not be the same as what was already paid
although generally, those 2 numbers match
so in this case gross tax is the sum of current and deferred tax. Why would not be appropriate to take income tax paid since the term is "Payments to government"?
You have the advantage of being able to see the forms................and I follow your reasoning.........since they paid the amount they were supposed to pay (not every company does) then yes, use the payments to the government
You can take any income or cash flow statement. I do not have any form only the task to find a value from the Annual Report for "Payments to government" and I am asking which value should be the best one that reflects paymenst to government. OK you said use tax expense, right but I just wornder why not to take tax paid. Again I do not have any form for "Payments to government only the information that this refers for example to gross taxes and royalties less employee tax paid.
do those 2 numbers match? tax expense and tax paid?
No, this is the problem. I have to revise many Annual Reports on a global basis. In one case (out of 30) the value was the same. In other cases, few they are close, and in the rest of the cases they are quite different.
my concern is taking a value that should not be the correct one.
that's the reason for using the "tax expense".........this term should be what is OWED ..........whether or not all of it is paid...........
This implies that in some cases I take a low value when they actually paid a higher value...
the difference is most likely tax they are paying from a previous year......
Ok, so what is reported as tax expense is what companies must pay regardless when
you mentioned above that companies "paid the amount they were supposed to pay (not every company does)". What do you mean by saying not every company does?
its exactly what we were talking about......the difference in tax expense and tax paid
OK thanks for the confirmation.
You're most welcome
Please come back if we can help you again.
OK have a nice day.
Actually, I am a bit confused still as I received feedback from one company for which I check theri data as follow "For payments to government they could take the taxes paid, which amounted to x". I also read that the value for income tax expense is an estimate and not what is really paid every year. Do you have any comments?
Well, then the value that best reflects payments to governement is Income tax paid and not income tax expense...