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rsc1925m
New Member

I resale items I purchased and paid taxes on. Will I be taxed on those same items when I resell?

 
1 Reply
KochuK
Employee Tax Expert

I resale items I purchased and paid taxes on. Will I be taxed on those same items when I resell?

Hi rsc1925m, thanks for post the question.

 

When you purchase an item for resale, it becomes your inventory. You may pay sales tax at purchase if you do not have a resale license. But there is no income tax for purchases.

 

Generally, when you sell inventory for a profit: sales less cost less administrative expenses = net profit which is subject to income tax and self employment tax.

 

Hope the above clarifies.

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