Originally Posted by Speedracer
Dang, I didn’t know that. Then they also pay taxes when they originally bought the same item from their supplier too !!!!!! Then the same money is used to pay the employees who get taxed on their paycheck. Whew.

If a seller does not have a sales tax account number and pays tax on items to resell, that tax, the cost of the item, shipping and other legit expenses are deducted from his gross sales to get a net profit that is taxed as income.

A vendor who charges sales tax gets an account number from the state. He uses that number when he buys inventory to resell and doesn't pay a sales tax on it. He also can deduct inventory costs and other expenses to determine taxable net profit income.