<p>All businesses must pay tax on their income; that is, the revenue of the business less deductible expenses. How that tax is paid depends on the form of the business. Small businesses (sole proprietors and single-member LLCs), partners in partnerships, and S corporation owners pay taxes through their personal income tax returns. Here&#39;s how that works. </p><p>Some states impose a gross receipts tax on businesses instead of a state income tax. In these states, gross receipts (revenues) of the business are taxed. Some states allow deductions for this tax and some types of businesses are exempt in some states. Sole proprietor businesses are usually exempt. Corporations and sometimes LLC&#39;s are most likely to pay gross receipts taxes. </p><p>Sales tax is required to be collected by merchants in most states and paid to the state department of revenue. Specific products and services are sales-tax eligible and money must be collected and paid, and reports must be completed on a regular basis.</p><p>Don&#39;t forget online sales tax, which many states now are requiring for specific types of sellers (like affiliates). </p><p>If a business owns real property(real estate), the business must pay property tax to the local taxing authority (usually the city or county) where the property is located.The tax is based on assessed value (like your house). </p><p>Excise taxes are those paid by a business for certain types of use or consumption (like fuels) and activities (transportation and communications, for example).Excise taxes are paid to the IRS, either quarterly or annually, depending upon usage, on Form 720. </p><p>Self-employment taxes are those paid by sole proprietors and partners for social security and medicare, based on the income of the business.LLC owners also must also pay self-employment tax. Owners of corporations who work as employees do not have to pay self-employment tax. This article explains how self-employment tax works. </p><p>Employment taxes are those paid by the owner of a business for several types of taxes based on gross pay of employees. These taxes include FICA taxes (for social security/medicare), federal/state unemployment, and federal/state worker&#39;s compensation taxes. How all of these taxes work is explained in this article. </p>States charge franchise taxes to corporations based on the value of the company. These taxes are similar to a state income tax.