How is sales tax calculated?
Say that it costs you $40 to make an item. You sell it for $100, charging the customer $110, because of 10% sales tax. You then forward the $10 to the state at the periodic intervals required. If you did not charge the customer tax, you would still have to send the $10 in to the state – it would just come out of your profits, that’s all. The profit you made, if any, is irrelevant for sales tax. Profit is subject to income tax, possibly paid as estimated tax at intervals.
Sales tax on the merchandise total is charged for items shipped to the following states: AL*, AR*, AZ, CA*, CO*, CT*, DC*, FL*, GA*, HI*, IA, ID, IL*, IN*, KS*, KY*, LA*, MA, MD*, ME*, MI*, MN*, MO*, MS*, NC*, NE*, NJ*, NM*, NV*, NY*, OH*, OK, PA*, RI*, SC*, TN*, TX*, UT, VA*, VT*, WA* and WI*. Sales tax is also charged on all delivery and processing charges for states with an asterisk. The local sales tax of the delivery destination is charged.
