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Balance sheet

Tax payable

Income and other taxes owed to governments but not yet remitted as of the balance-sheet date.

Tax payable is a short-term liability on the balance sheet showing the tax the company owes right now but has not yet handed over. Taxes are not paid the moment they arise. The coffee shop earns profit through December but sends the tax on it the following spring, and meanwhile it also holds payroll taxes deducted from staff wages and sales taxes collected from customers, all waiting for their transfer date.

Everything accrued but not yet transferred sits in this line until it goes out. Unlike supplier bills there is no stretching it. It simply reflects the normal lag between owing tax and paying it, and a balance roughly in proportion to the company's tax expense is exactly what you should expect to see.

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