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Reasons to adjust your sales tax liability (what you owe)

You will need to make an adjustment to your sales tax liability (what you owe) if any of the following has occurred:

  • You received a credit because you overpaid your previous sales tax payment.

  • Your state or local government allows you to deduct the amount of sales tax paid to vendors or suppliers when you're reselling the products you purchased from them.

  • Your tax agency allows a discount for making an early sales tax payment.

    Many states allow an early payment discount (from .05% to as much as 3%). Other states allow a credit to compensate small business owners for collecting and remitting the sales tax.

  • Your tax agency charged a fine, penalty, or interest because you made a late payment, didn't file on time, or did not pay your sales tax.

    The Utah State Tax Commission has a minimum penalty of $20 and a maximum penalty of 10% of the unpaid tax. In addition, interest is charged at the rate prescribed by law from the original due date until paid in full.

  • You need to account for sales tax calculation rounding differences between QuickBooks and your state sales tax form.

    Many users calculate the sales tax on their state's sales tax form and get a different amount owed than QuickBooks shows.

    The difference may be over or under by a few cents or dollars, particularly if you use sales tax group items. Make a sales tax adjustment in QuickBooks to account for any differences.

  • Your tax agency has a threshold over which a different sales tax rate applies.

  • Your tax agency has a sales tax holiday.

To pay a penalty or fine that you don't need to include on a sales tax return, simply write a cheque to the sales tax agency from an expense account that you create for this purpose.

In general, you make a sales tax adjustment to:

Move money into or out of a sales tax liability account

For example, to
  • pay a penalty or fine that you need to include on the sales tax return

If your specific task is not listed, see How to adjust your sales tax liability (what you owe)

Assign sales tax amounts to a line items

See also

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