Line 23 of the IRS code says you can deduct state and local taxes imposed on you as the seller of goods, If you collected the sales tax from the buyer, You must also include the amount collected in gross receipts or sales on line one.
But it goes on to say do not deduct state and local sales taxes imposed on the buyer that you were required to collect and pay over to the state. These taxes are not included in gross receipts or sales and are not a deductible expense.
So are the sales tax is that I am remitting to the state being imposed on me or the buyer? That will determine whether or not I need to list the sales taxes under gross and then deduct them or not list them at all.
See photos from IRS website attached.
