Q. Are the sales taxes I pay to my state for my business sales a deductible expense on my Schedule C?
A. Simple answer: yes, but only if you include the sales tax collected in your income.
You actually have a choice: 1. You can include the sales tax, that you collect, as gross income received. In that case, you claim a deduction for the sales tax that your remit to the state. 2. Don't include sales tax collected, in "Gross receipts and sales" or Other income. In that case, you also don't claim the deduction.
