What is the difference between gross sales and net sales when reporting taxes?
Gross sales is how much money came in. (Let's say I sold 100
widgets at $10 each, my gross sales would be $1,000) Net sales is
the profit after expenses (let's say I bought those 100 widgets
from a manufacturer at $ 8 each. My profit per widget was only $2,
so my net sales would be $200) In most areas, taxes are based on
net sales, rather than gross sales.