Compare between taxes on goods and Income Tax?
Answers
Answer:
Sales tax is the tax on the sale or lease of goods, and is what is known as a “pass-through tax.” Unlike income tax, sales taxes is decided and administered by state governments only. Merchants are required to collect sales tax from their customers and remit it back to the state,
Answer:
If you’ve been in business for awhile, this post isn’t for you, so feel free to skip ahead. (Maybe you want to get into the nitty gritty of whether storing items in an Amazon FBA warehouse gives you sales tax nexus?)
But one thing we’ve noticed from beginner sellers is a little confusion between sales tax and income tax. And hey, that comes with the territory. Most people see the word “tax” and immediately cringe. To take the time to look further into it, means you’re serious about your business. We applaud you. So this post will go into the very basics of sales tax and income tax and get you started dealing with both.
Income Tax 101
Income tax is a direct tax that you pay on your income. This is the tax that we’ve all been dealing with since we started working. The United States has a federal income tax, which is handled by the IRS. Forty-three states and the District of Columbia also have an income tax, so unless you’re lucky enough to live in Alaska, Florida, Nevada, South Dakota, Texas, Washington or Wyoming, then you have to file a state income tax return, too.