Does sales tax impact the income statement?
It depends on whether you are selling the product or buying the product. As the seller, you would collect sales tax and remit to the government. There is no income statement impact when you are the seller.
However, if you are the buyer, you will likely be charged sales tax. When you are charged sales tax, you should record recognize the cash outflow for sales tax as sales tax expense in the income statement.
Back To All Questions