Quote:
Originally Posted by Rekna
Buying goods for resale is different than buying goods for a manufacturing process. Are goods purchased for manufacturing taxed?
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As I recall working for an OEM (original equipment manufacturer) we did not have to pay sales taxes for items purchased and included in our final products for resale. I think we did pay sales taxes on computers, office equipment, tools, etc.. that are required but not resold. The cost for these items along with the taxes were of course included in our overhead calculations and passed on to our customers.
It is probably more accurate to say that all goods contain in their price the local, state and federal (sometimes international) taxes paid by every company of every component and service used in the manufacturing process. There are so many taxes in the distribution chain that it would be difficult to list, probably dozens maybe hundreds, and each item has a different tax history. Then the manufacturer adds their taxes and passes on the cost to the retailer who adds their taxes and passes on the cost to the consumer who pays sales tax based on the price of the item.