Re: sales tax at Moscow Renaissance Fair

[Marc <cram3813@uidaho.edu>]

>The problem is that the sales tax is charged on the total sales, not just 
>the profit.  If the group sells $2000 worth of food at the fair, but paid 
>$1000 for the ingredients, it has earned $1000 for its program.  But with 
>the 5% sales tax charged on its $2000 worth of sales ($100),it actually has 
>earned only $900.

If the business itself was paying the tax, I would agree.  This is not an
income tax but a tax on sales.  The customer pays the tax.  The business is
not charging the tax--the state is.  The business merely collects it for
the state. (And are not compensated for doing so, I must add.)  It is not
considered part of the profit in any way.  It just flows through the
business.  Ultimately the consumer will see higher prices and the booths
will make the same as before.

Marc