Hello majmaj!
I hope this will answer your question. Please feel free to ask for
clarification if you need more details about any specific part of my
answer, or if this does not fully answer your question.
First of all, yes, a seller's sales tax collections WOULD be included
as part of gross selling price.
Gross selling price simply means the price that a good is sold at, as
far as the purchaser is concerned. It is nothing more complicated than
that. This should include any taxes, duties, etc.
Incidentally, gross selling price is basically a synonym for gross
price. This can apply to goods sold at a store, or basically anything
sold at all.
If you wish to get the NET selling price, or the amount of money that
goes to the seller, you will have to subtract the tax from the gross
selling price. This is charged by different governments at varying
levels, so consultation with that specific government' resources would
be necessary to find the exact amount of gross selling price that goes
to taxes for the seller.
"The gross selling price is the amount that is paid for the tea at the
market. To calculate the money that the companies receive for the tea,
the sales costs have to be subtracted. This is the net selling price.
The net selling price minus the costs of production leaves the margin
that is left for the companies as income, or profit."
http://216.239.51.100/search?q=cache:4TKKgWIUnQkC:home.hetnet.nl/~liberalisingtea/chapter5.html+%22gross+selling+price+%2Bis%22&hl=en&ie=UTF-8
I did reference many other sites to find this answer, but I did not
find any specific site that gave a definition. However, all the sites
agreed that gross price includes tax.
Terms used:
"gross selling price +is" "sales tax"
"gross selling price"
"gross price +is" tax
Other sites used:
Other elasticities and taxes
http://www.rci.rutgers.edu/~gag/NOTES/micnotes4.html |
Clarification of Answer by
coldfusion-ga
on
13 Sep 2002 07:52 PDT
Yes, but once the sales tax is applied to the gross selling price, the
new gross selling price includes sales tax.
A bit confusing, but you have to think about it this way.
Gross basically means that nothing is modified.
IE: If I want to sell a shoe for $5.00, that is the gross selling
price.
If the government adds a tax of 5% to that gross selling price, the
new
gross selling price is then $5.25
So in the end, gross selling price does include tax.
And if you'd like further proof, I will provide further clarification.
I wish you would have gone this route before posting this rated
answer. I will provide further 'proof' of this statement a little
later today.
Thank you,
Todd
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Clarification of Answer by
coldfusion-ga
on
13 Sep 2002 10:16 PDT
This should clear the issue up for you.
Gross sales is *not* the same as gross selling price. Gross *price* is
basically the same as gross selling price.
Gross selling price or gross price is the price of one good.
Gross sales is the cumulative total of all sales of a company within a
frame of reference. (IE: Gross sales for one week, gross sales for one
product, etc.) This is entirely unrelated.
Since your question did not address the intracacies of other facets of
accounting law, so we will get back to gross selling price (or gross
price).
From a powerpoint presentation given at an economics class:
"There are two prices
The gross price (which includes the tax) paid by buyers
The net price (which does not include the tax) received by sellers"
ecolan.sbs.ohio-state.edu/mumy/econ200/lectures/lecture8-April29.ppt
From a document on the web:
"(b) The Contractor's invoice shall list separately the gross price,
amount of tax deducted, and the net price charged"
http://www.nrcc-london.com/repnform/229-7001.pdf
From another economics course
http://wuecon.wustl.edu/~rstein/Ps4Answers.pdf
"The basic logic of taxation does not change: consumers pay the gross
price and farmers keep the net price. The only diŽerence from the
standard case is thatthe net price is greater than the gross price
because the \tax" is negative"
An article on VAT that references gross/net prices
http://bobi.ifs.hr/~mpinter/ste_glre.html
"For example: If the net price of the product is 1000 units and the
country's tax is 20%, you pay gross price 1200 units and get 200 units
back later. However, 200 represents only 17% of the gross price (1200
units), despite it does represent 20% of the net price (1000 units)."
This particular article also shows how to calculate net price from the
gross price.
A brokers article referencing net/gross prices
"The concrete answer is that the broker's fee is the difference
between the gross price paid by the buyer and the net retained by the
seller. It really is that simple...the difference between the gross
and the net."
http://www.buyct.com/whopaysthefeetext.htm
From a commerce website referencing gross/net prices
"In instances where the combined cost of postage and packing and the
net price of the product(s) after the deduction of tax is greater than
the gross price of the product(s) selected on this Website than
customers will be emailed to enable them to select their delivery
preference and confirm their order."
http://www.applejacks.co.uk/international_orders.htm
A site I found from California referencing gross/net prices
"Assuming the statutory incidence is on the producers, the supply
curve shifts up by the amount of the per unittax, $2. Now, the
equilibrium occurs where Q + 2 = 24 Q. This implies 2Q = 22, or Q* =
11. We plug in thisnew Q* to see that the new gross price is Pg = 24
Q* = 24 11 = 13. Since the tax is $2 per unit, the net priceis equal
to Pn = Pg tax = 13 2 = 11. "
http://ist-socrates.berkeley.edu/~econ131/assignments/ps5_sol.pdf
Some sites specifically define gross price as not including tax, but
in fact this would be net price. It is simply an incorrect use of the
term.
The simple definition is as follows:
Gross selling price is the price paid for by the buyer.
Net selling price is the price received by the seller.
I am sorry if it appeared I did not have authoritative sources for my
previous answer, however I had many snippets such as above. I simply
did not see the need to post the links in their entirety in order to
prove my point. I will remember that if you post any questions in the
future.
I hope this clears this up for you.
Thank you,
Todd
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