What kind of business revenue should be taxed?

Discussion in 'Accounting and Taxes' started by KKAPADIA, Sep 27, 2014.

  1. KKAPADIA

    KKAPADIA
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    I work at a hotel. We "collect" taxes from guests for room stays and pay taxes on our profits. My understanding is that anything that is "sold" to a customer counts as revenue and must be treated as income and taxed, but also we must "collect" sales tax from the customer as well and send that to the appropriate government body. My question is that we receive revenue and profit from a gift shop, laundry machine, and a general miscellaneous category...don't we have to "collect" tax from these categories as well or do we categorize is as an extra service and just pay business income tax on these only?

    Please help! Thank you!
    Keval
     
  2. Chris_Tax

    Chris_Tax
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    To keep it simple. You pay income taxes on your net profit. Basically any goods you sale are subject to sales tax or user tax.
     
  3. Mark Robinson

    Mark Robinson
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    I agree with you. You just pay the tax as sales tax and the normal income tax as citizen of the country.
     
  4. James Martin

    James Martin
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    Income tax is levied by the government directly on income, especially an annual tax on personal income.
     
  5. shivshakti

    shivshakti
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    When you provide services to a customer staying in your hotel, he pays you rent for the services, sales tax etc. Sales tax is actually levied on the provider of the services by the governing body but is legally allowed to be borne by the consumer of the services. Service tax is supposed to be completely borne by the service provider though they mostly dont. We provide services and get paid for them, the service of a laundry machine etc in this case are the added benefits. that in my opinion can be decided by the organisation if they want to collect taxes for them separately or not. The rent mostly include the cost of all these facilities already
     

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