"mbmail" <mbmail[at]yahoo.com> wrote:

- quote -

I don't understand your question. Sales taxes are collected
at the point of sale when you buy goods subject to the sales
tax. I'm in TX which is one of the states that benefit from
this new law. When I filed my 2004 tax return, I used the
sales tax table amount. I didn't have any large ticket items
(new car, boat, etc) to add to the table amount. I haven't
filed returns for every state but am not aware of a "sales
tax" that is collected via an annual "sales tax return".
Maybe you are running a business that collects sales tax and
pays the collected tax to the state. This is not the sales
tax that can be deducted now in states with no income tax.

Mike Lewis, CPA

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Yes. You are most likely a cash taxpayer and report the
income and expenses in the year that you receive the income
or pay the expenses.

Missy Doyle

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mbmail wrote:

- quote -

We'd like to help if we could. However.....

How did you obtain income which included sales tax? Does
that mean you're operating a business? Sounds like it,
since you mention Schedule C.

The sales tax you collect on sales is NOT income to you.
You report as gross receipts only the sales figure, not
including the tax. You're merely holding the sales tax in
trust for the state. In short it gets reported no where.
The sales tax you collected in December was sent to the
state in January, right?

RIGHT? You did send it, right? And if you did, perhaps
the state awarded you a certain percentage (3% in Georgia,
varying percentages elsewhere) as a fee for handling the
matter. Just don't forget to report this as income in this
year on 2004 schedule c. It goes up top under "other
income."

ChEAr$,
Harlan Lunsford, EA n LA
Wed 9 Mar 2005

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2004 was the first year I had income which included state
sales tax, but I didn't actually pay the state until 2005.
Do I leave Form 1040 Schedule C Line 23 blank on my 2004
return?

Thanks for the help! -MB

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