I am an online store. When customers order from me, i go to another online store, purchase it, and send the product to my customer. (I am a drop shipper)
When i purchase the product from another online store, i have to pay the sales tax that is charged. Do i also need to remit sales tax based on my revenue? This will mean the government has double taxed the product.
Side facts:
- I do not have reseller cert
- I have physical presence in California
Simple example: (Assuming 10% sales tax and i charge $1 per transaction)
- Customer purchases $10 item
- I charge Customer $12 due to $10 * 1.1 + $1
- I purchase the product from another store for $11
- My revenue is $12, profit is $1
- I have to pay corporate tax on $1, do i have to remit another $1.2 (10% of revenue) on sales tax?
Thanks in advance!!