Occupation Tax Law and Legal Definition
Occupation tax refers to a levy imposed for the privilege of carrying on a business, trade or profession. It is a fixed charge levied usually as a license fee, on professionals such as attorneys, and doctors. The occupation tax is in form a gross receipts tax, levied on the retailer rather than on the purchaser. The power to levy occupation tax is derived is from the police power of the state to regulate its citizen’s activities.
In Department of Revenue ex rel. People v. Steinkopf, 160 Ill. App. 3d 1008 (Ill. App. Ct. 1987), the court defined the occupation tax as a tax imposed upon persons engaged in the business of selling tangible personal property at retail at the rate of four percent of the gross receipts from such sales.