Guide

Supplies and equipment for resellers: how the costs are usually handled

Packing tape, boxes, a label printer, shelves. Resellers spend on these all the time. This page explains how the costs are usually sorted so you know what to track.

General information only, not legal or tax advice. I am not a CPA or an attorney.

Summary

• Costs of running a real business can generally be deducted if they are ordinary and necessary for it. A deduction lowers your taxable profit. It does not cancel your tax bill.
• Small, used-up items are usually treated as supplies and deducted in the year you buy them.
• Things that last for years are equipment. Some can be deducted all at once and some are spread over several years, depending on cost and the rules.
• Inventory you buy to resell is cost of goods sold, not a supply. It is tracked separately from supplies and equipment.
• You do not need an LLC to deduct business costs. A sole proprietor can too. You do need a real business and good records. See hobby or business.

Supplies: things you use up

These are the everyday costs of packing and selling:

• Packing tape, boxes, mailers, bubble wrap, void fill, and other packaging
• Shipping labels and thermal label rolls (the postage itself is a shipping cost)
• Printer paper, ink or toner
• Price tags, hangers, cleaning products, steamer supplies
• Table covers, bags, and signs for in-person events

Supplies are normally tracked as a business expense in the year you buy them. On the federal Schedule C for sole proprietors, they commonly go under supplies or office expense. Ask your CPA which line fits.

Equipment: things that last

Examples for a reseller: a thermal label printer, a postal or kitchen scale, a camera or lighting kit, a computer, shelving, folding tables, a tent for outdoor markets.

Three common ways to handle the cost:

• The small-purchase rule. The IRS de minimis safe harbor lets a business deduct items costing $2,500 or less per item (or per invoice, per the rule) in the year bought, if it makes the election with its tax return and expenses these items in its books under a consistent policy. A $200 label printer fits.
• Deduct it all at once. Bigger purchases may qualify for Section 179 expensing or bonus depreciation, which can allow the full cost in the first year. Limits and eligibility rules change, so this is a CPA question.
• Depreciation. The cost is spread over several years. Some owners choose this on purpose to spread deductions across years.

Which choice is best depends on your profit, your plans, and the rules for that year. That is your decision with a CPA. Flipfiled does not advise on it.

Cost of goods sold, supplies, and equipment are different

The three are treated differently, so keep them in separate categories from the first day.

The IRS describes cost of goods sold as beginning inventory, plus purchases, minus ending inventory. Because ending inventory is subtracted, a pile of unsold goods bought this year is not simply a deduction this year. A business that buys or sells merchandise generally keeps an inventory, although the IRS lets small businesses choose a simpler method. Ask your CPA which method applies to you.

Other items to keep straight:

• Postage and platform fees are separate categories. They are not supplies, equipment, or inventory.
• Personal use. If you use a computer or printer for both business and personal things, record the business share and keep notes on how you worked it out. Goods you take for personal use are not part of the cost of goods sold.

Sales tax on supplies and equipment

The CRT-61 resale certificate is for goods you buy to resell. It does not cover tape, boxes, printers, or shelves. You generally pay sales tax on those like any other buyer. Keep the receipt, since the tax you paid is part of the cost.

Records to keep

• A receipt or order confirmation for every purchase, with the date, vendor, and what it was
• A note of the business use percentage for anything you use personally too
• One place that lists purchases by category. A spreadsheet works, and Flipfiled gives paying clients one.
• Pay business costs from a business account when you can. See opening a business bank account.

Questions for your CPA

• Should I expense my equipment this year or depreciate it?
• Do I need to make the small-purchase election?
• How should I record equipment I use for both business and personal use?
• What happens to the deduction if I sell the equipment later?

I am not a CPA or an attorney

This page is general information, not legal or tax advice. It does not say what you can deduct. Tax rules change each year and depend on your situation, so check with a CPA and the IRS. Flipfiled helps with registrations and filings from information you provide.

Sources: De minimis safe harbor election, Treas. Reg. 1.263(a)-1(f) (Tax Training Academy summary); Supplies vs. equipment vs. depreciation guide (Categorize My Expenses, secondary source); Section 179 and depreciation 2026 (Jupid, secondary source).

IRS sources: Schedule C (Form 1040) line labels, Parts II and III; IRS fact sheet FS-2006-23, Cost of Goods Sold and the Tax Gap; Publication 334, Tax Guide for Small Business (inventories); Publication 535, Business Expenses; Publication 946, How to Depreciate Property. The Schedule C line labels, the cost of goods sold formula, and the inventory rules were checked against the IRS documents on Oct 27, 2026. The $2,500 rule and the Section 179 summary come from secondary sources. Confirm them with the IRS.