Should I list the sales tax I collected or the sales tax that I actually paid this year under under Tax & License expenses.

[1bmtmd1]

The amounts are substantially different due to paying some this year that was missed in previous year.  Also the last quarter of this years sales tax remittance isn't due or paid until next year.

[DS30 · Accepted solution]

It depends

For sales taxes on items you sell -

The sales tax that you collect on your items sold and remitted to the state's Department of Revenue is not reported as an expense related to your business. Also, you will need to make sure that your gross sales total does not include the state sales taxes collected for remittance.

So when reporting your business income and expenses, reduce the gross sales total by the any amount of included state sales tax and do not include these remitted state sales taxes as a business expense.

Please refer to this IRS link for more information about Business Expenses

For sales taxes on items you buy -

Include these as part of your cost for the items purchased. The taxes and license section is used to report such things as local city taxes or property taxes on an office building.