@SirDouglasB12 wrote:
The sales tax is not something you would include, since it is not part of your revenue. You sold a product for X dollars, but you got paid X plus sales tax. The sales tax is paid to the state, not you. When you enter your income, you only enter what you got paid, NOT including the sales tax.
For example, I sell a product for $1164.15, but my state sales tax is 0.07375%, so I collect from the buyer a total of $1250. When I report my income, I only report the 1164.15 because the sales tax (85.85) got paid to the state.
In most states, yes.
In most states, the sales tax is imposed on the buyer, not the seller. So you do NOT report your income including the sales tax. You only include income that does NOT include the sales tax.
From IRS Publication 535:
Do not deduct state and local sales taxes imposed on the buyer that you must collect and pay over to the state or local government. Also, do not include these taxes in gross receipts or sales.
https://www.irs.gov/publications/p535#en_US_2022_publink100013838
