The big issue I see is that some businesses will receive 1099 forms which will include the sales tax especially those darn 1099-ks. thus a business owner faces the dilemma of getting a notice from the IRS because of a revenue mismatch if they exclude sales tax from revenue and some 1099s include it.
if this is your situation, I would just ignore what the IRS says and include sales tax in revenue and take a deduction for the payments which if your cash basis would have to include payment made after the year for the current year. consistency is required and should not be changed. (changing would probably require filing form 3115). what's really needed is for the IRS to revise its forms to have a line to subtract out the sales tax.
possibly a workaround on some forms would be to include sales tax in revenue and take it out where there's a line for returns and adjustments.
the funny thing is accrual basis taxpayers don't have this issue at least with the iRS.
