If you plan to start a business as a dealer or vendor selling goods to the public, or as a restaurant owner, you’ll need to pay a mercantile tax each year. This business tax is calculated as a percent of your total gross receipts.
The amount you’ll pay on those gross receipts depends on what your city’s business licenses, permits & tax division has set up as the tax rate. As an example, it might be $1 for every thousand dollars of goods you sold. So if last year you sold $100,000 in merchandise, you would have to pay a mercantile tax of $100.
How and When to File Your Mercantile Tax
Each year, you have a deadline to pay your mercantile taxes. Miss that deadline, and you may be taken to court and fined. The smartest thing to do is mark your mercantile tax deadline on your calendar and make sure you pay what you owe well before that date.
If you are unable to pay your mercantile taxes on time, contact the department that accepts payments to see if you can make alternate arrangements for getting your taxes paid.
First, make sure you have any type of business license your city requires, and display it prominently at your place of business. File your tax return as you normally would, along with any documents required for the mercantile tax that show your gross receipts. Once you’ve received confirmation of what you owe, send payment for the mercantile tax to the appropriate agency.
If you’re worried you’ll mess up the process, hire an accountant to ensure that you file your taxes correctly and pay the right amount of mercantile taxes before they’re due. That will keep you compliant and prevent further headaches.