What is the accounting policy of Batteries Plus Bulbs regarding the collection and remittance of sales taxes?

According to Batteries Plus Bulbs' 2025 Franchise Disclosure Document, Batteries Plus Bulbs and Ascent collect sales tax from certain customers and remit the entire amount to the appropriate governmental entities. Their accounting policy is to exclude the tax collected and remitted from both merchandise sales and the cost of merchandise sold.

For a prospective Batteries Plus Bulbs franchisee, this means that the sales taxes they collect from customers are not included in their reported revenue or expenses. This is a common accounting practice, as the franchisee acts as a collection agent for the government, and the sales tax amounts are simply pass-through funds. This simplifies the franchisee's accounting and provides a clearer picture of the actual sales revenue and cost of goods.

This policy ensures that the financial statements accurately reflect the company's performance by separating the actual revenue generated from sales from the sales tax amounts that are collected on behalf of the government. Franchisees should ensure they understand how to properly record and remit sales taxes in accordance with local and state regulations.