state or local tax based on a percentage of the selling price of the goods or service that the buyer must pay. It is not revenue to the seller, who simply collects it and passes it onto the state or local government. Assume credit sales of $30,000 are made with a sales tax rate of 8%. The entry to record the sale is:

Accounts receivable                   32,400
                    Sales                                        30,000
                    Sales tax payable                        2,400

The purchaser cannot deduct sales tax as an itemized deduction.