Specific revenue streams omitted from percentage rent calculations.
By Angel Campa, Founder · Updated March 2026
Properly defined sales exclusions protect tenants from paying percentage rent on non-operational revenue like gift card sales, employee purchases, delivery service commissions, returns and refunds, and sales taxes. Without explicit exclusions, the landlord can argue that all revenue counts toward the breakpoint calculation. For a high-volume retailer, missing exclusions can inflate percentage rent by 10-20%.
Listed in the "Percentage Rent" section, usually as a defined list of excluded items following the gross sales definition. May be extensive in well-negotiated retail leases.
Lextract uses a combination of AWS Textract OCR and Claude AI to identify and extract the sales exclusions from your lease PDF. The AI searches for all pages of the document, then assigns a confidence score based on OCR quality and extraction certainty. Fields with lower confidence are flagged for human review.
Annual Base Rent
The total base rent payable for the first full lease year.
Payment Frequency
The interval at which rent is due.
Escalation Type
The methodology used to increase rent over the term.
Fixed Escalation %
The static percentage by which rent increases annually, if applicable.
CPI Index Used
The specific inflation index utilized for variable escalations.
Percentage Rent Rate
The percentage of gross sales payable to the landlord.
Common exclusions include sales tax collected, returns and refunds, gift card activations (until redeemed), employee discounts, internet/catalog sales not fulfilled from the premises, insurance proceeds, and tips or gratuities. Each must be explicitly listed to be effective.
Only if the lease explicitly excludes internet or e-commerce sales. Modern leases are increasingly specific about whether online orders placed in-store, curbside pickup, or click-and-collect transactions count toward gross sales. This is a heavily negotiated point in retail leases.
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