No. The sales taxes collected by a retailer are not part of its sales revenues. This means that the sales taxes collected by a retailer will not be reported on its income statement. Rather, the sales taxes collected are reported on the balance sheet as a current liability until they are remitted to the government.

To illustrate, let's assume that all of a retailer's products are subject to a state sales tax of 6%. If the retailer sells $500 of merchandise for cash, it will collect $530. This will be recorded with 1) a debit to Cash for $530, 2) a credit to Sales for $500, and 3) a credit to Sales Taxes Payable for $30. Note that the Sales account did not include the $30 of sales taxes.

When the retailer remits the sales taxes to the government, the liability account Sales Taxes Payable will be debited.

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