What is the tax rate?
Please see the Single Business Tax Rate Tables for more information. How is the SBT calculated? The SBT liability starts with calculation of the total tax base. For most taxpayers the primary components of the tax base are compensation, business income (federal taxable income), and several additions or subtractions. • Compensation includes salaries and wages, plus the employer’s costs for nearly all fringe benefits. Beginning in 2004, there is a partial exclusion of certain medical benefit costs. Compensation does not include FICA, unemployment insurance or workers’ compensation. • Additions include depreciation, taxes based on income, net operating loss carryover or carryback, dividend and interest payments, and certain royalty expenses. These are added only to the extent they were deducted on the federal return. • Subtractions include dividend, interest and certain royalty income reported on the federal return.
The tax includes a state rate of 6.8 percent plus a gross receipts tax rate of 2.37 percent, for a combined state communications services tax rate of 9.17 percent. Each local taxing jurisdiction may add its own local tax rate on communications services. Direct-to-home satellite services are taxed at a total rate of 13.17 percent. Local tax does not apply to these satellite services. The state and gross receipts tax rates stay fairly constant. However, local tax rates can change frequently. A list of all the current and past local jurisdictional rates is available online. For a list of current rates only, download the Jurisdiction Rate Table. For example: Local, long distance, or toll telephone; mobile communications; private line services; pager and beeper; telephone charges made by a hotel or motel; fax; and telex, telegram, and teletype are taxed at a state rate of 6.8 percent plus 2.37 percent gross receipts tax plus applicable local tax.
