Do sales tax and payroll withholding in my account count as revenue?

Neither is yours. Both sit in your account, and both distort a figure an underwriter is reading — but they distort different figures, and only one of them is visible on the face of the statement.

Sales tax: the deposit distortion

Tax you collect belongs to a state. It arrives in the same swipe as the sale, lands in the same deposit, and leaves weeks or a month later as a single remittance.

Three consequences.

Payroll withholding: the balance distortion

This one does not touch deposits at all, which is why it gets missed.

Employee income tax withholding, the employee share of FICA and the employer share all sit in your account between the payroll run and the deposit deadline. Depending on your deposit schedule that can be days or weeks.

Average daily balance is one of the more heavily weighted figures in bank-statement underwriting. A balance that includes trust money is a balance that overstates your actual cushion, and the day the remittance clears, the real position appears. If a daily debit is running against that account, the remittance date is the day it bounces.

What to do about each

Sales tax.

1. Configure the point of sale or invoicing system to split tax at the point of sale.
2. Post tax collected to a liability account, never to income.
3. Transfer the collected tax to a reserve account on a fixed schedule — weekly is easy to run and removes the temptation.
4. Remit from the reserve, against the liability.
5. Reconcile the liability account to the filed returns each period. A liability balance that does not match what you filed means one of the two is wrong.

Payroll withholding.

1. Move the full tax component to the reserve account on the same day you run payroll, not on the deposit deadline.
2. Use a payroll provider that impounds taxes at the point of the run if that suits you — the money leaves immediately and the problem disappears, at the cost of losing the float you should not have been using anyway.
3. Never treat the deposit deadline as a cash-flow tool. Unpaid payroll trust taxes carry personal exposure for responsible persons under federal law, which is a category of risk entirely different from ordinary business debt.

The related items that behave the same way

Anything you hold for someone else has the same effect and should be treated the same way.

In each case the same two corrections apply: record it as a liability rather than income, and hold it somewhere you will not spend it.

What to hand a funder

Do the arithmetic yourself and put it on the page. A short bridge with the statements:

• Total credits on the operating account
• Less transfers from your own accounts
• Less funding proceeds
• Less refunds and returned items
• Less sales tax collected
• Equals revenue

Plus, if you are running payroll trust money through the same account, one sentence: "Average daily balance includes payroll tax liabilities of approximately X held between the payroll date and the deposit date; a reserve account was established on [date] and these are now held separately."

The reason to volunteer this is not virtue. An analyst who strips out tax without being told does it with an estimate, and estimates are conservative. An analyst handed your calculation checks it against the filed returns and uses your number. And the business that has already moved trust money to a reserve is demonstrating the thing the whole file is trying to establish — that the operating balance is real, that obligations are funded before they are due, and that the cushion behind the account is not borrowed from a state.