Depending on your type of business and your sales tax requirements, you may encounter a variety of special sales tax situations and needs that you may need to address when setting up or charging sales tax. This topic discusses some of these special situations. You'll find information about how to set up your sales tax items (with sales tax rates and tax agencies) and sales tax codes (taxable and non-taxable status) for that particular situation. You'll also learn how the sales tax is handled in QuickBooks.
Remember that sales tax requirements vary by tax district (city, county, state) so be sure you know them before you set up QuickBooks for these special sales tax situations.
Click "More ..." for the sales tax situation that applies to your particular need.
Charge sales tax for two different tax districts and report the sales by each district. More ...
What to do: Set up a different sales tax item for each tax district, even if the sales tax rates are the same and you are paying the same tax agency.
Results: QuickBooks will report by sales tax item so you can see the sales tax payable by tax district.
Collect sales taxes for several districts on each sale and pay the sales taxes to a different tax agency for each tax district. More ...
What to do: Set up a sales tax item for each tax agency, even if the sales tax rates are the same. Create a sales tax group item that combines those sales tax items so you have one sales tax charge on your sales forms.
Results: QuickBooks will report by each sales tax item so you can see exactly what is owed to each tax agency.
Report non-taxable sales that fall outside the state or the tax district. More ...
What to do: Assign non-taxable sales tax codes to the customers and use an out-of-state sales tax item with a 0% sales tax rate.
Results: The sales tax liability report will show all non-taxable sales. You also can create a customized report that shows all
out-of-state sales and sales tax.
Report sales that are non-taxable because the customer is a reseller. More ...
What to do: Assign one or more non-taxable sales tax codes to the transaction to identify that these sales are for resale.
Results: The sales tax liability report will show all non-taxable sales.
Report to the tax agency the reasons why various sales are non-taxable. More ...
What to do: Set up different non-taxable sales tax codes to identify the reasons that these sales are non-taxable. Assign these sales tax codes to the appropriate items. If the items are usually taxable, you can change the sales tax codes for individual items at the time you make the sale.
Results: The sales tax liability report will show all non-taxable sales. The sales tax revenue summary report will provide the breakdown of the non-taxable sales by non-taxable sales tax code.
Charge two different sales tax rates for items on the same sale. More ...
What to do: On your sales form, list all of the items that have the same rate. Add a subtotal item below each set of items. The Tax field at the bottom of the form will clear when you add a tax line in the detail area. However, you can't record a sale if this field is empty. Create a new sales tax item with a 0% sales tax rate so you can fill in this field.
Results: QuickBooks includes the taxable items subtotaled above each line item in that sales tax line item's gross sales and taxable sales. Non-taxable items included in the subtotal above each sales tax line item are included in that sales tax item's gross sales and non-taxable sales.
Charge sales tax for all items on a sale at one sales tax rate, then charge an additional sales tax rate for some of the items. More ...
What to do: List all of the items that are taxable at the different rate together on the sales form, then add a subtotal item below that set of items. Add a sales tax line item for the additional sales tax rate below the subtotal line. In the Tax field, choose the sales tax item whose rate is charged for all the taxable items.
Results: All taxable items are included in taxable sales for the sales tax item in the Tax field. Items with the additional tax are included only in taxable sales for the sales tax line item.
Charge sales tax for shipping and handling. More ...
What to do: Set up an "other charge" item called "shipping and handling" and make it taxable.
Results: QuickBooks calculates sales tax on shipping and handling, since you've marked it as a taxable item.
Correct the sales tax calculations for certain situations, such as tiered sales taxes. More ...
What to do: Create a sales tax item for the sales tax you need to charge. Enter the sales tax as a line item on a sale, then select and type over the amount of the sales tax using an amount you calculate yourself.
Results: QuickBooks reports the amount you type in as the amount of sales tax you owe to your tax agency for the sale. Taxable sales and non-taxable sales amounts are based on the taxable and non-taxable amounts included in the item (usually a subtotal) above the sales tax line item.
Add sales tax codes
Add sales tax items
Troubleshoot sales tax problems