Sales tax

[Tayo]

If I am a sole proprietor and I make a gross profit that is positive but the sales tax puts me in the negative, can I pay less sales tax legally of I am responsible for the sales tax regardless of the net income?

[Andrew_W]

Hi @Tayo ,

Based on your question, I'm assuming that you are operating a business that sells items subject to sales tax. 

Sales tax is separate and removed from income taxes in these cases. Essentially, you as the business are collecting the sales tax being levied by state/local goverment. These are not deductible business expenses and as such do not offset any business income. Generally, the state/local tax authority that handles sales tax in your jurisdiction requires the taxes to be remitted to them, regardless of your business' profit or loss.

Generally speaking, you should not include sales tax collected as revenue for your business, nor as a deduction against business income.

Hope this helps clarify for you!