There are thousands of sales tax rates, requirements, and payment rules in
the various tax districts (cities, counties, and states) of the United States.
Setting up sales tax with the correct rates and requirements will make it easier to fill out your sales tax forms when it comes time to remit (pay) your sales tax.
Example of a partial sales tax remittance form
Use this check list to find the information you need to set up sales tax for
Check to see whether your state has sales tax. Alaska, Delaware, Montana,
New Hampshire and Oregon do not charge sales tax. Also, some states have
taxes that differ from sales tax.
For example, New Mexico has a "gross receipts" tax where the business
owner is responsible for paying tax to the state on all transactions, rather
than on items sold. Some other states have a "use tax" or "general
excise tax" rather than a sales tax (or in addition to a sales tax). These
other types of taxes cannot be set up with the QuickBooks sales tax feature.
Most states require you to have a sales license, a seller's permit, or some
document that allows you to sell products or services in your state. In many
states, there is a number on the document, such as a sales license
number, which is used as the account number for paying
sometimes take two to three weeks to get a sales license or permit.
Determine if you need to charge a single sales tax rate or if there are several sales tax rates that you need to
charge (for several tax districts in your sales area). For example, if you have one store in a location where only a state sales tax applies (no city or county sales tax), you only need to charge the state sales tax rate.
However, if you sell your products in several different cities or counties around your state, you may need to charge different sales tax rates for the different locations. This is because each city or county tax district may have its own sales tax, in addition to any state sales tax you may already need to charge. Knowing this information will help you determine the type of sales tax items you need to set up.
Check whether your state requires you to charge sales tax according to where
the product is shipped or sold. This is called a destination-based sales
You need the name of your tax agency (sometimes referred to as the tax
authority) so that
a vendor for
If you charge multiple sales tax rates, you may pay all of the sales
tax to one tax agency, or you may need to pay a different tax agency for
Find out if your state wants you to charge your sales tax based on an accrual
basis (when you make the sale) or cash basis (when you actually receive
payment for the sale). Regardless of how you've set up your company for financial
and tax purposes, your tax agency determines the basis for your sales tax
Find out how often you need to make your sales tax payments so you can set
up your payment schedule in the QuickBooks Sales Tax Preferences.
Check for downloadable payment forms and online payment options. Several states are now
requiring businesses to make their payments online.
Each tax district (a town, city, county, or state that charges sales tax) may have its own rules and regulations for collecting and paying sales tax. For example, you might have a cap on sales tax, where you charge sales tax only up to a certain amount, such as $5000.
Or, you might have regulations that require you to pay your sales tax to the tax agency every quarter.
Important: We recommend
that you talk with your accountant for assistance in setting up sales tax for your specific business needs. If you don't have an accountant, Intuit can help you find one.
Set up sales tax