The sales tax is not part of your sale, it is money you collect from the customer on behalf of the government so you can remit it to the taxing authority. So, you don't have to include it in your income. If you report the income as hobby income, you can report the full amount listed on your Form 1099-K and then enter an adjustment to "Other Income" to back it out. If you report the income as self-employment income, you can deduct the sales tax as tax expense.
You can make that adjusting entry in TurboTax as follows:
1. From the Federal menu in TurboTax find Wages and Income
2. Find Less Common Income
3. Choose Miscellaneous Income, 1099-A, 1099-C
4. Choose Other Reportable Income
5. Enter a description of the adjustment and the amount as a negative number
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