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posted Jun 4, 2019 6:27:18 PM

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?

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1 Best answer
Level 15
Jun 4, 2019 6:27:23 PM

 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.

3 Replies
Level 15
Jun 4, 2019 6:27:20 PM

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

Level 15
Jun 4, 2019 6:27:21 PM

. . . 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.

Level 15
Jun 4, 2019 6:27:23 PM

 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.