Reporting Sales Tax

You must calculate sales tax on total taxable receipts from vending machines and amusement devices. You cannot deduct the cost of items sold, machine rental, or space rental.

If you pay a rental fee or a percentage of sales to the owner of the machine’s location, you must calculate sales tax before deducting any fees or commissions.

If you sell both taxable and nontaxable items from vending machines, you must keep accurate records separating the sales of nontaxable items from taxable items.

If records separating taxable and nontaxable items are not kept, all sales are considered taxable.

Vending machine receipts include all applicable state and local sales tax. Because vending machine receipts include the sales tax collected, you need to subtract the sales tax from receipts before reporting your sales and use tax.

If you paid sales tax on products sold through a vending machine, you are allowed to make an adjustment for the tax paid before reporting the sales on your return. Make the adjustment on your return by:

1. Reporting the full sales amount as Gross receipts.
2. Reporting the difference between the sales price of the item and your cost of the item (not including tax) as General rate sales and on any applicable local tax line. Because you paid tax on your cost of the item, this adjustment results in reporting sales tax on the markup only.