So my first thought is that you need to amend your prior tax returns. In your example (I'm from MN, so I now those numbers are not actually accurate), rather than reporting $100 of income, you should be reporting $90.91 of income ($90.91 +10% = $100). But then in turn, the sales tax should be based on $90.91, not $100."
I don't think that would be the correct way of handling it. If you do handle it that way, the sales tax then paid to the state would not be deductible.
Since gross income reported was $100, then any amount paid in sales tax would be a deduction from the $100. Any change to that would be considered a change in accounting method and would need to follow those rules.
Furthermore, since the remittance to the state didn't take place until several years after the fact, the deduction would take place in the year the amount was determined and paid. Especially if the cash method of accounting was used.
