I own a small retail store which reported to the IRS net earnings of
$40,000 for 2004 and $35,000 for 2003. Now I want to sell my store in
order to move out of state. What sale price should I ask for my store?

Essentially what a buyer would be buying is a $35,000 - 40,000 a year
job. How many hours would they be working to earn that?  Break that
down to per hour.

If the business is healthy - I'd venture one years salary max plus inventory.

The value of your business would be the value of its assets
(inventory, fixtures, etc...) plus the present value of its income
stream.

I forget the formula for present value, but you will need to have an
estimate of expected income growth and inflation.

Of coures the market will determine what you can sell your business
for, but valuation is a good starting point.