Gross receipts and gross sales both define the total amount of money that your business has received in a given period, such as a year or quarter. The primary difference is that gross sales refers specifically to sales income, while gross receipts includes income from non-sales sources, such as interest, dividends or donations.
The IRS defines "Gross receipts" as "The total amounts the organization received from all sources during its annual accounting period, without subtracting any costs or expenses." The federal government uses "Gross sales" to define income based on the total sales price of your reported inventory sold. However, each state may set its own definitions of specific tax terms, so if you're unclear on what your state counts as "Sales" versus "Receipts," check with your state's Department of Revenue.
In financial terms, "Gross" income of any kind refers to the amount you receive before any deductions or taxes are taken out. For example, if your business sold $100,000 worth of products but had $2,000 worth of returns and a $45,000 investment in the goods it sold, your gross sales would still be $100,000. If your business had $30,000 in interest and dividend income on top of the $100,000 in gross sales, your gross receipts would be $130,000.
If you operate a nonprofit organization, you must report gross receipts as your total income, rather than gross sales, as your income is most likely not sales-driven. For-profit businesses generally have sales income, which includes sales of services as well as goods. If your business has no other income type, your total gross sales may equal your total gross receipts.
"Receipts" in the term "Gross receipts" is not directly related to the concept of a paper receipt, such as the written record of a specific sale. Instead, it's a form of "received," so think of "Gross receipts" as equivalent to "Total money received."