To open an account with the wholesaler I had to provide a Business Tax ID, and proof of resale liscense. I would like to sell most of the products I buy at cost to friends- I will not be profiting from this. Do I have to report this stuff as inventory? And do I still have to charge sales tax on them? I wonder because they have my Corp. Tax ID, so do they report my purchases to any revenue services?
My business is located in Illinois, and the total gross sales from this endeavor will be equal to or less than one percent of the business's gross income.
Thanks in advance for your help...
2007-02-13 10:41:05 · 3 answers · asked by ccgeogeek 1 in Business & Finance ➔ Taxes ➔ United States
When you buy wholesale, you do not pay sales tax on the item. So when you sell it, your buyer has to pay sales tax and you have to remit the sales tax to the state. If you buy something for $100, sell it to your friends at your cost of $100, you are not earning money, in fact you are losing money, because you have to remit sales tax on that $100 sale. If you are going to sell it to your friends at your cost, you need to have them pay the sales tax.
2007-02-13 10:48:10 · answer #1 · answered by jseah114 6 · 0⤊ 0⤋
Like my favourite shop "Home Bargains/ Quality Save, they have a load of stock delivered from the manufacturers and sell it dirt cheap. Their Easter Eggs have been 1/2 supermarket price this week and I've taken advantage of it. It must be an overload of stuff that they can't get rid of and so sell it off to shops cheaper. I've noticed that Easter eggs are ridiculously cheap this year, they only sell them at reduced cost after Easter to get rid of overload.
2016-05-24 06:56:48 · answer #2 · answered by Anonymous · 0⤊ 0⤋
You're doing retail sales to end consumers. Yes, you must collect and pay in sales taxes.
2007-02-13 10:45:40 · answer #3 · answered by Bostonian In MO 7 · 1⤊ 0⤋