If you buy products with a wholesaler's license does the government require you to report your profits if you resale the stuff or is that only required if you have a business license and are running a business.
2007-09-12 11:23:05 · 9 answers · asked by Nikki 2 in Business & Finance ➔ Taxes ➔ United States
Repeat after me, "I make a profit, I pay taxes on the profit."
2007-09-12 16:49:17 · answer #1 · answered by Anonymous · 0⤊ 0⤋
You are required to pay income taxes on your profits of the business. Your products are your inventory.
If you are not a business and you are buying products with a wholesaler's license and not paying sales tax on your purchases, you could be commiting tax fraud. First, if you are not paying sales tax on your purchases, then a use tax is due on your purchases. Second, you are issuing a resale certificate in bad faith. There are stiff fines for issuing any type of sales tax exemption document in bad faith. The fine is for each instance and can be as high as $10000. Therefore, if you use your wholesaler's license to buy groceries every week, you could be subject to $520,000 in fines to avoid the little bit of tax that would be due in comparison to the fines.
2007-09-12 15:19:16 · answer #2 · answered by Steve 6 · 0⤊ 0⤋
If you have a wholesaler's license you'll not pay sales tax on items purchased for resale. Items you keep for use in your business are fully taxable.
All profits are ALWAYS fully taxable, regardless of whether you have any sort of license or not. If you're buying things low and selling them high and making a profit, you ARE operating a business.
2007-09-12 12:36:12 · answer #3 · answered by Bostonian In MO 7 · 1⤊ 0⤋
Usually, you don't pay taxes on products purchased for resale or raw materials used to produce your product. Taxes may or may not be collected on items such as furnishings and office supplies, depending on the state. Since the seller usually has to report to the state all sales to wholesalers when taxes were not collected, the state may decide to audit your business for tax compliance. If you use a wholesaler license to avoid paying sales tax, they could levy the tax plus penalties.
2007-09-12 11:35:11 · answer #4 · answered by r2mm 4 · 0⤊ 0⤋
If you have a wholesaler's license, you are considered a business and the government will tax you on your profits.
2007-09-12 11:26:59 · answer #5 · answered by magnolia 5 · 0⤊ 0⤋
Of course - everytime you buy something, you pay for the tax, but the business owners are paying a little bit less because they have to make some money for their living. Having business is very expensive at front and if they will be taxed like consumers does, they will not eat. They have to be a member of board of equalization to get a little discount though. Theres fee for this too. Nobody is getting the ride free really.
2007-09-12 11:32:05 · answer #6 · answered by earth angel 4 · 0⤊ 1⤋
you lost me (as accepted). maximum states ALREADY tax any product, different than for foodstuff.. and a few tax that. in case you desire to talk tax ranges, bypass forward. give up appearing like there have under no circumstances been any taxes, and the government.is without notice doing some thing new.
2016-10-04 11:23:10 · answer #7 · answered by ? 4 · 0⤊ 0⤋
If you are using the products yourself or giving them to friends then you have to pay sales tax on the items but that is it.
2007-09-12 11:27:43 · answer #8 · answered by ralph 5 · 0⤊ 0⤋
pay only on your profits
2007-09-12 11:28:14 · answer #9 · answered by CW L 3 · 0⤊ 0⤋