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NYC unincorporated business tax (UBT)

My NYC sole proprietorship business sells goods on various internet platforms. I'm not sure of what is considered my gross income when I'm trying to determine whether my business is a subject for NYC unincorporated business tax (UBT) or not. Does it come from federal Schedule C line 1 (gross receipts or sales) or line 7 (gross income)? The general UBT requirement - gross income of more than $95,000 (prior to any deduction for cost of goods sold or services performed) - sounds confusing in my case.  My sales (line 1) are greater than $95K and gross income (line 7) is less.

Thank you.

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1 Best answer

Accepted Solutions
JohnB5677
Employee Tax Expert

NYC unincorporated business tax (UBT)

Gross income line 7 should be used.  However, any sales tax paid should not be included in either line 1 nor line 7.

 

The sales tax that you collect on your items sold and remitted to the state's Department of Revenue is not reported as an expense related to your business. Also, you will need to make sure that your gross sales total does not include the state sales taxes collected for remittance.

 

So when reporting your business income and expenses, reduce the gross sales total by the any amount of included state sales tax and do not include these remitted state sales taxes as a business expense.

 

Please refer to this IRS link for more information about Business Expenses

 

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1 Reply
JohnB5677
Employee Tax Expert

NYC unincorporated business tax (UBT)

Gross income line 7 should be used.  However, any sales tax paid should not be included in either line 1 nor line 7.

 

The sales tax that you collect on your items sold and remitted to the state's Department of Revenue is not reported as an expense related to your business. Also, you will need to make sure that your gross sales total does not include the state sales taxes collected for remittance.

 

So when reporting your business income and expenses, reduce the gross sales total by the any amount of included state sales tax and do not include these remitted state sales taxes as a business expense.

 

Please refer to this IRS link for more information about Business Expenses

 

See Original Post

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