I’m working with a store that rents spaces to vendors. They collect rent and 10% of sales. Is it illegal to take rent out of vendor sales prior to cutting them checks?

[SweetieJean]

That is a legal or contractual question, not an income tax one. We cannot answer legal questions here.

[rjs]

. . . Furthermore, that would be a question of state law, not federal, so the answer might depend on what state you are in. You should consult a local lawyer who specializes in business law.

[Opus 17 · Accepted solution]

 If you have a contract that says you will pay rent plus a percentage for the space, then that is your contract. If you don't like it, go somewhere else. 

 As a tax matter, the 10% you pay off the top is one of your deductible business expenses along with the regular rent.