Gross Receipts Exclusions
Exclusions are deductions from the definition of gross receipts. Section 4-7.2-1(B) of the Fairfax County Code and Chapter 37 of Title 58.1 of the Code of Virginia lists the only deductions that can be claimed.
Expenses are not an allowable exclusion for most businesses.
The most frequently claimed exclusions are listed below. A complete listing of exclusions can be obtained from the Exclusion Worksheet in our Forms section or by contacting our office. Anyone claiming an exclusion must attach an Exclusion Worksheet (Form 8TA-EX) and provide the necessary documentation as required.
Most frequently claimed exclusions are:
- Persons who collect Federal and State excise tax on motor fuel as part of gross receipts may deduct this tax.
- Persons who collect Sales or Use tax as part of gross receipts may deduct this tax. Provide your Sales or Use tax account number as assigned by the State.
- 501(C) organizations may exclude business-related income from gross receipts. Unrelated business income remains taxable. Attach applicable 990 or 990T.
- Gross receipts do not include gifts, contributions and membership dues of a nonprofit organization.
- Sellers of Computer Hardware or Software that are purchased for resale to a United States Federal or State Government entity as allowed by Title 58.1-3732, of the Code of Virginia, can deduct the original cost of the equipment. Provide documentation supporting any exclusion from gross receipts. Documentation would include, but would not be limited to, a complete description of property sold, copies of invoices and contracts.
- Software Developers as defined in Section 4-7.2-1(B)(1)(z) of the Fairfax County Code whose gross receipts are derived solely from design, development or other creation of computer software for lease, sale or license performed from a definite place of business within the County may claim an exclusion. The exclusion is 100% of the receipts derived solely from the lease, sale or license of the software products. Other related receipts (such as training, installation and integration) are not deductible. Documentation will be required to receive this exclusion. See the exclusion worksheet for the list of documentation required to receive this exclusion.
- Real Estate Brokers (New for 2003). In accordance with the Code of Virginia, Title 58.1-3732.2, "In the event that a real estate agent receives the full commission from the broker less an adjustment for the business license tax paid by the broker on such commissions and the agent pays a desk fee to the broker, the desk fee and other overhead cost paid by the agent to a broker shall not be included in the broker's gross receipts."