Sales tax is money you collect for the state. It is never your revenue and never your expense, and the bookkeeping follows from that.
When you collect
- You sell taxable goods (and in some states, services) to buyers in a state where you have nexus: a physical presence, or sales above the state's economic threshold (commonly $100,000 or 200 transactions).
- Marketplaces (Amazon, Etsy, eBay, Walmart) collect and remit for sales on their platforms in nearly every state. You do not collect again.
- Your own website sales are your responsibility once you cross a state's threshold.
Recording it
Sales tax collected is a liability until you remit it. When you pay the state, the liability goes down. It never touches the profit and loss. ProfitBooks records the payment to the state as sales tax remitted; if your sales exports separate tax collected, it is booked as a liability.
Tools
For collection and filing across states, a dedicated service (TaxJar, Avalara, or the marketplace itself) is the right tool. Your books just need to reflect the liability and the payments.