What is the accounting policy of Batteries Plus Bulbs regarding sales tax collected from customers?

According to Batteries Plus Bulbs's 2025 Franchise Disclosure Document, the company collects sales tax from customers in certain locations and remits the full amount to the relevant government authorities. Importantly, Batteries Plus Bulbs's accounting policy is to exclude both the sales tax collected and the amount remitted from both merchandise sales and the cost of merchandise sold.

For a prospective Batteries Plus Bulbs franchisee, this means that the sales figures reported in their financial statements will not include sales tax. This provides a clearer picture of the actual revenue generated from sales of products, as it is not inflated by the inclusion of sales tax amounts that are simply pass-through funds. Similarly, the cost of merchandise sold will not be affected by sales tax considerations.

This accounting practice is fairly standard. Excluding sales tax from revenue and cost figures provides a more accurate representation of the company's financial performance. Franchisees can focus on managing their core business operations without the distraction of sales tax amounts affecting their key financial metrics.