Do classes have to pay sales tax on materials used?
"In most jurisdictions, both the goods (raw materials) and the service (class) are being ""sold"" to the customer, who is the end user and thus the sale is subject to sales tax. So, when your friend charges for the class, that $100 is subject to all applicable sales taxes for the jurisdiction and all parent jurisdictions (usually city, county and state). The teacher should not have to pay sales tax when they buy the flowers from the wholesaler; most jurisdictions charge sales tax on end-user purchases only. However, they are required to have some proof of sales tax exemption for the purchase, which normally comes part and parcel with the DBA or other business entity registration paperwork in most cities/states.  Wholesalers deal with non-end-user sales (exempt from sales tax) all the time, but your average Michael's or Hobby Lobby may not be able to deal with this and may have to charge your friend the sales tax at POS. Depending on the jurisdiction, if this happens, your friend may be able to reduce the amount the customer is paying that is subject to sales tax by the pre-tax value of the materials the customer has paid for, which your friend already paid the tax on."
The money from the employer is counted as income for you, and should be included in the numbers on your W-2.  You also have tuition you paid. That is an educational expense. That would generally be a tax credit if you qualify for those educational tax credits. If the money from the employer was counted as income you can use also claim tuition expenses. If the money wasn't included as income you then can't claim the tuition as an educational expense. My experience has been that expenses such as books have not been covered, but could be paid for with the money from a 529. Money to cover mandatory fees: such as lab fees and a fee that all students must pay can be counted as tuition expenses. Regarding customized books, those are much harder to prove. If you were to count that particular book as a tuition expenses, and were audited, you would have to show them the book to prove it. Most books aren't mandatory. Also if you do want to claim the books as an expense, remember to account for the money that is returned if any are sold back to the bookstore at the end of the term. In many cases yes.  In the case of an employer handing employees a credit card to use, that is clearly income if the card is used for something other than a business expense. Generally speaking, if you're receiving something with a significant value without strings attached, it is likely taxable. Google no doubt has an army of tax attorneys, so perhaps they are able to exploit loopholes of some sort. If i am not wrong, any business activities such should be declared on Year End Tax filing. If your friend is going to own that website either it is commercial or nonprofit, he has to declare in the year end taxation. "The short answer is you're tax exempt if the tax laws say you are.  There are a bunch of specific exemptions based on who you are, what you're buying and why. Taking British Columbia as an example. One exemption is supplies for business use: Some exemptions are only available to certain purchasers in certain circumstances. These exemptions include: You can also claim an exemption if you are buying ""adult size"" clothing for a child under 15 years. Farmers are exempt from sales tax on various goods and services. First Nations individuals are exempt in some circumstances. And so on and so on." Any commercially distributed product needs to be taxed. Depending on country of residence and distribution, legislation varies widely, therefore the best place to ask would be your local small business counsel or even your local taxation office. Depending on the size of your business, you might need a license to sell them in the first place anyway and that comes with its own set of prerequisites. It sounds like something is getting lost in translation here. A business owner should not have to pay personal income tax on business expenses, with the caveat that they are truly business expenses. Here's an example where what you described could happen: Suppose a business has $200K in revenue, and $150K in legitimate business expenses (wages and owner salaries, taxes, services, products/goods, etc.) The profit for this example business is $50K. Depending on how the business is structured (sole proprietor, llc, s-corp, etc), the business owner(s) may have to pay personal income tax on the $50K in profit. If the owner then decided to have the business purchase a new vehicle solely for personal use with, say, $25K of that profit, then the owner may think he could avoid paying income tax on $25K of the $50K. However, this would not be considered a legitimate business expense, and therefore would have to be reclassified as personal income and would be taxed as if the $25K was paid to the owner. If the vehicle truly was used for legitimate business purposes then the business expenses would end up being $175K, with $25K left as profit which is taxable to the owners. Note: this is an oversimplification as it's oftentimes the case that vehicles are partially used for business instead of all or nothing. In fact, large items such as vehicles are typically depreciated so the full purchase price could not be deducted in a single year. If many of the purchases are depreciated items instead of deductions, then this could explain why it appears that the business expenses are being taxed. It's not a tax on the expense, but on the income that hasn't been reduced by expenses, since only a portion of the big ticket item can be treated as an expense in a single year. In the UK we give small businesses the option not to charge sales tax and as a business owner I can see a parallel.  Then I think about it from the perspective of a black, career-focused woman who happens to be put in front of a racist HR manager who thinks all women are baby factories and I realise it's not the right solution at all. "Payment gateways such as Square do not normally withhold tax. It is up to you to pay the appropriate tax at tax time. That having been said, Square does report your payments to the IRS on a form 1099-K if your payments are large enough. According to Square, you'll get a 1099-K from them if your total payments for the year add up to $20,000 AND more than 200 transactions.  Whether or not they report on a 1099-K, you are required to pay the appropriate taxes on your income.  So now the question becomes, ""Do I have to pay income tax on the proceeds from my garage sale?"" And the answer to that question is usually not. When you sell something that you previously purchased, if you sell it for more than you paid for it, you have a capital gain and need to pay tax on that. However, generally you sell things in a garage sale at a loss, meaning that there is no tax due.  If you make more than $20,000 at your garage sale and the IRS gets a 1099-K, the IRS might be curious as to how you did that with no capital gain. So if you sell any big ticket items (a bulldozer, for example), you should keep a record of what you paid for it, so you can show the loss to the IRS in the event of an audit." I think it should be free. Why? I had a coupon for 35, I bought something for 35.01 including taxes and total to pay was 0.01, rounded to 0.00. I think it's almost the same scenario. From Tax Benefits for Education Student-activity fees and expenses for course-related books, supplies   and equipment are included in qualified education expenses only if the   fees and expenses must be paid to the institution as a condition of   enrollment or attendance. It seems to me the books are not a deduction unless the above criteria is met. If they charge a fee to accept an item, it's reasonable to assume the item has insignificant value, so the only tax-deductible bit would be the money you donated to their charity. What you describe sounds like a fee for service, not a charitable donation. The organization should provide a fee breakdown to show what percentage (if any) of the fee is a deductible contribution. There could be some additional PA-only tax benefit, but I didn't come across anything in my brief search. No. The equipment costs are not necessarily a direct expense. Depending on the time of purchase and type of the expenditure you may need to capitalize it and depreciate it over time. For example, if you buy a computer - you'll have to depreciate it over 5 years. Some expenditures can be expensed under Section 179 rules, but there are certain conditions to be made, including business revenue. So if your business revenue is $3K - your Sec. 179 deduction is limited to $3K even if more purchases can qualify. Not every purchase qualifies for Sec. 179 treatment, and not all the State tax rules conform to the Federal treatment. Get a professional advice from a CPA/EA licensed in your State. Taxes should not be calculated at the item level. Taxes should be aggregated by tax group at the summary level. The right way everywhere is LINE ITEMS SUMMARY PS:If you'd charge at the item level, it would be too easy to circumvent the law by splitting your items or services into 900 items at $0.01 (Which once rounded would mean no tax). This could happen in the banking or plastic pellets industry. Disclaimer: I am not a tax specialist You probably need a sales tax permit if you're going to sell goods, since just about every state taxes goods, though some states have exemptions for various types of goods.  For services, it gets tricker. There is a database here that lists what services are taxed in what states; in Wyoming, for example, cellphone services and diaper services are taxed, while insurance services and barber services are not.  For selling over the internet, it gets even dicier. There's a guide on nolo.com that claims to be comprehensive; it states that the default rule of thumb is that if you have a physical presence in a state, such as a warehouse or a retail shop or an office, you must collect tax on sales in that state. Given your situation, you probably only need to collect sales tax on customers in Wyoming. Probably.  In any event, I'd advice having a chat with an accountant in Wyoming who can help walk you through what permits may or may not be needed. For case 1, there is no tax due as you sold the book for less than your cost basis. If you had sold for more than $100, then you would have had a profit. For case 2, that depends on the value of the gift card with respect to the value of your fare. Most likely that gift card is less than the cost of the fare. And in that case it would generally be treated as a reduction in the purchase price. The same way that rebates and cash back on credit card are treated. Note if for some reason a 1099 was generated that would change the situation and you would need to consult a tax professional. Since that would indicate that the other party to the transaction had a different view of the situation.