Sales Tax Reporting Made Easy

Manage sales tax accounting and sales tax reporting with QuickBooks

  • Organize your accounting data, including sales tax information, in one central location
  • QuickBooks Online makes sales tax reporting and sales tax accounting easy
  • Access the Sales Tax Liability Report and other financial reports anytime and from anywhere
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Sales tax accounting

Businesses that sell a product or provide a service that is taxable are obliged to collect the appropriate sales tax and then deliver the money to the government. If you sell products or services in Alaska, Delaware, Montana, New Hampshire, or Oregon then you're in luck as these are the only five states that do not have a sales tax. If you sell products or services in the other 45 states, then you need to establish a process for collecting and paying sales taxes, which requires accurate sales tax reporting and sales tax accounting.

Sales taxes collected from customers and not yet delivered to the appropriate tax authorities are typically accounted for in a Sales Taxes Payable account. Money collected for sales tax is not revenue. It is only an amount of money received temporarily that you later transfer to the government. Therefore, a business's revenue and expenses are not affected by sales tax. Businesses simply collect and deliver the tax money.

QuickBooks Online is # 1 in cloud accounting for small businesses1. It organizes your accounting data in one central location, making it easy to manage accounting tasks such as bookkeeping, invoicing, and sales tax reporting. QuickBooks Online contains new and improved features that make sales tax reporting and sales tax accounting easy. You can track and report multiple sales tax items, setup one rate with multiple components, manage all of your sales tax rates, and more from the QuickBooks Online Sales Tax Center. Try QuickBooks Online for free and see how it makes sales tax reporting easy.

QuickBooks Online makes sales tax reporting and sales tax accounting easy

The QuickBooks Online Sales Tax Center puts all of your sales tax data at your fingertips. It organizes your information in one central location so that it's easy to track your sales tax payables and manage your sales tax reporting. QuickBooks makes it easy to charge sales tax to your customers and then run reports to see how much sales tax you should pay the appropriate tax agencies. Mark individual charges as taxable and QuickBooks Online will compute the total sales tax on invoices, sales receipts, refund receipts, and credit memos.

Sales tax reporting becomes complex when local regions in the same state levy sales taxes at different rates. For example, Los Angeles County may charge a different sales tax rate than San Francisco County, though they are both in California State. In QuickBooks Online, you can easily setup different tax rates within the same State or you can setup combined tax rates. If you use combined rates, you can set different sales taxes as components of the combined rate so that the sales tax appears as one charge to customers on invoices or sales receipts. However, the Sales Tax Center breaks down that charge into components, ensuring that you pay the right amount to the right agency.

QuickBooks Online automatically applies sales tax rates to recurring invoices and to the transactions of your frequent customers to save you time and improve accuracy. After you set up sales tax rates in the QuickBooks Online Sales Tax Center, you can use those rates on any sales transaction or apply them to invoices. When you apply a sales tax rate to a particular customer, that rate is "sticky" for the customer and will be automatically applied to each of that customer's future transactions.

The QuickBooks Online Sales Tax Center is a central hub for all of your sales tax activities. You can see how much you owe each tax agency, how much you've previously paid, and you can access sales tax reporting. In just a few clicks you can generate your Sales Tax Liability Report to see the taxable amount and the tax collected by agency and rate. Try QuickBooks Online today and see how it makes sales tax reporting and sales tax accounting easy.

1 Based on number of paying users as of August 2012