Generally I dont want to say too much because I dont want to upgrade this worthless sticky thread.
Yes, but Sales Taxes and VAT.
You are absolutely right, that businesses need to pay VAT and sales tax.
This however has nothing to do with an entity being considered tax transparent (pass through/disregarded) for income tax purposes.
When you talk about tax liability you need to ask: who is liable ?
The entity or the persons making up the entity ?
If you create a disregarded entity (LLC being treated as a partnership or a partnership itself),
the income tax liability is shifted to the membes/partners.
VAT and sales tax are different from income tax.
In a conventional partnership, the partners are responsible for one another’s debts.
This means that if the partnership owes VAT, each partner is jointly responsible for the debt.
This statement however depends on the partnership laws in different countries.
What I write is true in England, but might not be true in France.
This might have been true in 1990. Nowadays, warehouse means always Sales Tax/VAT liable.
What I have been referring to is income tax,
What you refer to is VAT and Sales tax.
The treatment of income and value added tax depends on different criteria.
VAT is an administrative headache (at least for me).
However, the tax burden is minimal since you only pay the difference between
your sales price
minus
your purchase price.
You buy for 100, you sell for 100, no VAT.
You just need to collect VAT and will get it back later.
This has nothing to do with becoming tax liable, in this case Sales Tax and/or VAT.
