Sales tax

Forum|Forum|2 years ago
April 6, 2024
2 replies
5 views

Hello lovely community,

I am preparing Form 1120 and filing a dozen of state returns since this corporation does business in many states selling machinery. Is it correct to report the total income from sales net of sales tax without showing sales tax paid for each state? Or I need to add the sales tax to the total income then show the sales tax paid to each state?

Thanks

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Accountant-Man

Level 13

Sales tax collected by sellers is neither income nor expense to the seller.

Report the total income from sales net of sales tax

If you sold in only one state and filed sales tax returns in that state, what amount is shown as total sales over 4 quarters? What total income from sales on the 1120 will equal all 4 quarters?

** I'm still a champion... of the world! Even without The Lounge.

sjrcpa

Level 15

If the books were done properly, you'd have the answer. When sales tax is a collected it is a lability to the tax authority. When it is paid to the tax authority it reduces the liability. It never hits the P&L.

The more I know the more I don’t know.

Y

YKubisAuthor

Level 3

Thank you all

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