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Multiple sales tax items on an invoice or other sales forms

Your business is required to display multiple sales tax rates on printed sales forms; i.e. Sales Receipts and Invoices

Overview

Some places, such as Puerto Rico, require multiple sales tax rates to be displayed separately on printed sales forms.

For example, Puerto Rico currently has a Sales & Use Tax rate of 5.5%. If the sale is made in a municipality such as San Juan, an additional 1.5% tax may be required. In this instance, both tax rates must be displayed on the printed sales form.

Other states may require you to apply one tax rate to the entire sale, and a second tax rate to the sale up to a certain dollar amount. For example, the entire sale is taxable at 4%, and the first $5000 is eligible for an additional 1% tax.

An added complication can occur if both taxable and nontaxable items are sold in any of these situations.

By using a subtotal item and tax items in your sales form, QuickBooks can correctly calculate and apply the different tax rates.

 

Note: If you are using QuickBooks for Mac, the steps in this article will not work. You will need to create a separate Sales Receipt or Invoice for each sales tax you are charging your customers.

Detailed instructions

To properly calculate, display, and print multiple sales tax items included on sales forms, you must first set up sales tax items and a subtotal item in QuickBooks.

Note: Set up a different sales tax item for each vendor and tax rate for which you collect sales tax. For example, you may have one rate for state, and additional rates for local taxes or municipalities.

Setting up Sales Tax items:

  1. Choose Lists > Item List.
  2. Click Item and choose New.
  3. Click Type and select Sales Tax.
  4. Enter the Sales Tax Name, Description, Tax Rate (%), and Tax Agency information.
  5. Click OK.
  6. Repeat steps 2 through 5 to enter as many sales tax items as needed

Creating a subtotal item:

  1. Choose Lists > Item List.
  2. Click Item and choose New.
  3. Click Type and select Subtotal.
  4. Enter the Item Name/Number and Description information.
  5. Click OK.

Creating an invoice using multiple sales tax items:

Important: Prior to using the following steps, you must verify that the default tax in the box below the body of the invoice is a 0.0% (out of state) sales tax item to allow the body of the invoice to properly calculate the sales tax rates by item.

  1. Choose Customers > Create Invoices.
  2. Enter all of the taxable items.  
    • Important: Do not include any non-taxable items; nontaxable items are added later.
  3. Add the taxable code to the right of each related item.
  4. Enter the subtotal item after entering all taxable items to generate a subtotal.  
    • Note: If you are calculating a tax based on a certain threshold sales amount, add the subtotal item below all the taxable items up to that amount. Then add the remaining taxable items along with the non-taxable items in step 5.
  5. Enter the appropriate sales tax item directly below the subtotal item to calculate tax on the subtotal amount.  
    • Note: Using a subtotal item on an invoice does not affect sales or commission reports.
  6. Enter any nontaxable items that are not subject to sales tax. Add non-taxable code to the right of each item as appropriate.
  7. Click Save & Close.
     

If these steps do not resolve the issue, you can read discussions and post messages and questions relating to your issue on the Intuit QuickBooks Community site for free or you can contact a technical support agent for additional guidance. Fees may apply.

KB ID# HOW13181
12/20/2014 3:31:24 AM
PPRDQSSWS403 9102 Pro 2013 6fd19f