I'm assuming you collected sales tax from customers and included it in income.
Yes.
From the Bradford Tax Institute
In the instant case, expenses represented by the debts would have been deductible under section 162 of the Code had they been paid by the taxpayer while he was still carrying on the business. The fact that the business has been discontinued does not prevent the deduction of expenses otherwise allowable to an individual taxpayer using the cash receipts and disbursements method of accounting. See Waters F. Burrows v. Commissioner,38 B.T.A. 236 (1938), acquiescence, C.B. 1938-2, 5.
[Edited 3/2/21 | 12:10PM EST]
