Value-added

COPILOT:

Help me understand taxation in US businesses; if I buy plastic cups to hold yogurt which I then sell to the final customer, is that purchase taxed and is the yogurt product taxed again when I sell it?

In the United States, the taxation system for businesses involves both the purchase of goods (inputs) and the sale of finished products. Here's a breakdown:

1. **Purchase of Plastic Cups**: When you buy plastic cups to hold yogurt, this purchase is typically subject to sales tax if your business is located in a state that imposes sales tax on business purchases. The amount of sales tax depends on the state's tax rate.

2. **Selling Yogurt**: When you sell the yogurt to the final customer, the sale is also subject to sales tax. The customer pays the sales tax on the final product, which is added to the sale price. The rate of sales tax varies by state and sometimes by locality within the state.

So, in summary, both the purchase of the plastic cups and the sale of the yogurt are taxed, but the tax is applied at different stages of the transaction. The business pays sales tax on the purchase of the cups, and the customer pays sales tax on the final product.

Does this help clarify things for you?

                                                          *     *     *

The above is a form of taxation not practiced in Canada. A product is only taxed once, and that

is when it is sold to the consumer. And it is taxed at a flat rate.

This model of taxation is called a value-added tax.

A value-added tax is not nefarious; it is meant to make taxation transparent!

                                                         *     *     *

My Facebook feed - linked to that of my daughter, Lyse - in on a network with 

younger members. Came through this morning, this interesting entry:

                                                           

*     *     *

It's Valentine's Day 💖 HAPPY VALENTINE'S TO ALL!