Ummm.... perhaps you're thinking about what's left after all
is said and done... Taxes are calculated on the profit after
expenses are deducted. Sometimes, after taxes are paid,
you're left with nothing, or worse, you lost money for the
year. This is basic accounting.

You're certainly able to add the cost of taxes to your service
or parts or whatever, but that has nothing to do with your
tax liability resulting from your profit.

For example, if you have a widget you're selling for $1, you
add 8% to the $1, which gives you a sale price of $1.08. If
the widget cost you $0.25, your profit is still $0.75, which
you'll be taxed on at the end of the year. It doesn't matter
if they sales tax is 8% or 300%.

If your cost for collecting the tax is $0.25, then your profit
will be less. If you add the cost of collecting the tax to your
gross sale price, then your profit will still be $0.75, you will
have to charge tax based on the new gross cost of the widget,
but you also risk losing customers due to potentially lower
cost widgets being available. So, it's a tradeoff between
selling your widget and making less profit and potentially not
selling your widget for the same profit.

If everyone raises prices due to an increase in costs, this is
called inflation. Their money is worth less per widget.

"Schoonertrash" wrote in message
...
Gee . . .I didn't know. In my business I added up all the costs .. .
.deducted them from the gross and what was left over after everything else
was the net profit. I always included taxes and the cost of collecting
them
on the cost side of the ledger and used the total to figure pricing. I
sure
didn't count them as profit. To me thre was no difference between taxes
and
UPS or electricity bills.

Just like when the tobacco companies got hit with the big fines and taxes.
Cost of smoking went up. Now what $6 a pack in New York I think. When I
worked for a store and the minimum wage went up the owner automatically
added five percent to everything to cover the increase in costs; e.g.
delivery costs for goods to the store due to automatic increase in
Teamster
wages. When the local county added 1/2% sales tax the store retail prices
went up to match.

I've never been in a business where taxes were taken from the profit side.
That's why sales tax is based on gross sales. What we did have to do was
change some other part of the formula. The only things you can change are
Price, Quality and Service. In our case we raised the price but changed
the
hours of business to fit time when others were not working and kept
quality
at a high level with no change. We also provided more service after the
sale. For example. Buy the software from us and we give classes for
customers at no charge. Buy elsewhere and it's $20 an hour tuition.

I still maintain in the end only the consumer pays taxes. Either as your
customer . .. or the hit you take out of your own disposable income.

But then . . . .I'm not in business anymore.

MST