
Quoting
Taxing Matters
The difference between what you sell the item for and the price you paid for it is indeed taxable income in the U.S. So if you buy a TV for $500 on your discount and sell it for $700 you have $200 in taxable income that you must report on your income tax return. Moreover, as you have been doing this as a regular activity, it may be considered business activity and thus subject to self-employment tax (Social Security and Medicare taxes) too. Failure to report the income can lead to very expensive civil penalties and/or criminal prosecution for tax evasion, which is a federal felony offense. Given the kind of money you seem to be making off this you really need to be keeping very good records of the purchases and sales and you need to ensure your income is properly reported on federal and state income tax returns.