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Can you give me an example of computing the tax on a tax-included basis?

If a business in Baltimore County, where the rate is 10 percent, has receipts from tax-included admissions totaling $9,900 for the reporting period, the tax is computed as follows:

Step 1 - Convert the tax rate to a decimal and add 1: .10 + 1 = 1.10
Step 2 - Divide the total receipts by the number obtained in Step 1 to find taxable gross receipts: $9,900 ÷ 1.10 = $9,000
Step 3 - Multiply the answer to Step 2 by the tax rate to find the tax: $9,000 x 10 percent = $900
Step 4 - Report taxable gross receipts of $9,000 and tax of $900.



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