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Which customers should be taxed?

a. Non-Profit Organizations
b. Consumers
c. Church/Religious Organizations
d. Re-Sellers

1 Answer

2 votes

Final answer:

Consumers are the customer group that generally should be taxed. Tax exemptions are often provided to non-profit organizations, religious organizations, and resellers. Households in the goods market pay sales tax, while entities like Amazon may support tax collection laws to help level the competitive playing field.

Step-by-step explanation:

The customers that typically should be taxed are b. Consumers. In most jurisdictions, consumers are required to pay sales tax on the purchase of goods and services. Non-profit organizations, religious institutions, and resellers often enjoy tax-exempt status. Non-profit organizations, such as a nonprofit health organization, are established to perform services for their members or the public and are not intended to generate profit. As such, they are often exempt from tax. In contrast, consumers who buy products or services for personal use are expected to pay sales tax, which is collected by merchants at the point of sale and later remitted to the government.

Tax exemption for certain entities like c. Church/Religious Organizations and other non-profits is granted because these organizations typically provide a public good, are not operated for profit, and often rely on donations and grants to operate. Resellers, or d. Re-Sellers, are taxed differently; they do not pay sales tax on goods they buy for the purpose of resale but must collect sales tax from their customers who are the end-users of the products.

d. Households in the goods market are the end consumers who are subject to sales tax. Large online retailers like Amazon may support tax collection measures like the Marketplace Fairness Act of 2013 for various reasons, including the simplification of tax regulation compliance and leveling the playing field with brick-and-mortar stores.

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