more-arw search

Q&A Forum

are vendor's rebates subject to tax ?

I buy merchandise from a reseller company for full price but i sell it at discounted price because they offer me a rebate from the discounted merchandise. I'm i supposed to pay tax on the full price of the merchandise, or should i be tax on the discounted price that i actually sold it for??

please help …
Thank you.

(I collected tax only on the discounted price )

Answers

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

By tax I'll make the assumption of Sales Tax.

There is Sales Tax, Use Tax and Income Tax.

If you buy an item for $10, and regardless if you get it for $9 or $8, if you sell it, you collect Sales Tax from the Customer based of Sales price.

If you buy it, don't pay sales tax (assuming you needed to pay sales tax), and use it internally, then you owe Use Tax (sale % but on of the purchase price).

Ultimately, you'll have to pay Income tax on the Net Income.

3007 views
Topics

Get Free Membership

By signing up, you will receive emails from Proformative regarding Proformative programs, events, community news and activity. You can withdraw your consent at any time. Contact Us.

Business Exchange

Browse the Business Exchange to find information, resources and peer reviews to help you select the right solution for your business.

Learn more

Contribute to Community

If you’re interested in learning more about contributing to your Proformative community, we have many ways for you to get involved. Please email content@proformative.com to learn more about becoming a speaker or contributing to the blogs/Q&A Forum.