I am an independent contractor for a direct sales company. They collect and remit sales tax for us (the amounts collected for sales tax never hits me bank account). Do I need to include the sales tax amounts in my gross income?

[AmyT]

Generally, sales tax collected is not included in gross income.

Since it a trust fund tax and is being collected on behalf of the state, it is not part of anyone's income (except the state).

However, if you did receive a 1099 that includes the sales tax that was collected, you will need to include this amount in your income.  You will then take a deduction equal to the amount of sales tax remitted.  

[liingalls]

Do I deduct that in "taxes and licenses" on the schedule C (if the collected sales tax was included on my 1099)?

[AmyT]

Yes, you can deduct that in the "taxes and licenses" section on your schedule C.