Sales Taxes – Schedule C Line 23

Technical topics regarding tax preparation.
#1
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New Jersey
A small business owner is a Schedule C filer. He purchases beauty products and then resells them for significantly more money. His company is then required to pay sales taxes to the state every quarter in relation to these sales. I want to know what happens if 1) his company collects the sales taxes from the buyer and what happens if 2) his company does not collect the sales taxes from the buyer in relation to the following questions.

Can I deduct the sales taxes that his company pays to the state during the year on line 23 of his Schedule C? Am I supposed to add the sales tax amounts that his company pays to the state to his gross receipts or sales on line 1 of his Schedule C?
 

#2
Nilodop  
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What state?
 

#3
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New Jersey
New Jersey
 

#4
Nilodop  
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OK, check me on this, but I believe NJ (like most but not all states), imposes the tax on the consumer. This thread (and probably some other ones) should help. viewtopic.php?f=8&t=14965&hilit=imposed+sales+tax
 

#5
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Gray, TN
With option number 2 your client is almost certainly overpaying his sales tax obligation. You should show him how to back into his sales tax number.
 


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