You may be required to collect taxes for certain goods and services you offer. QuickBooks helps you keep an accurate record of these taxes so you can easily monitor and remit them to the appropriate tax collecting agency.
It also helps you complete other sales tax-related tasks.
If you encounter problems while working on your sales tax, see Resolve common sales tax issues.
Note: Before you set up your sales tax items/groups, make sure you check the tax rates and requirements with your tax agency.
To start recording sales tax in QuickBooks Desktop, you need to turn on this feature and set up sales tax items or tax groups.
Sales tax item
A sales tax item is used to add and calculate tax charges when you make a taxable sale.
To create new sales tax items:
To edit an existing sales tax item:
Sales tax group
Set up sales tax group for multiple sales tax items that appear on the same sales transaction. When you set up a sales tax group, you can track and report sales taxes individually although they show as a single line item on your invoices and sales receipts.
To set up the non-taxable status of an item:
To set up the non-taxable status of a customer:
To create specific tax codes:
If you want to create a tax code specific to your business needs, from the Tax Code drop-down, select Add New. Other non-taxable codes that you can use are the following:
|Sales Tax Code||When to use|
|OOS||OUT-OF-STATE SALES. Many states do not charge sales tax for out-of-state sales. You might assign this sales tax code to a customer who has bought your product from your company catalog, but lives in another state. Many QuickBooks company files already include this non-taxable sales tax code.|
|LBR||LABOR. In many states, labor services are not taxed, so you might assign LBR to a service item. Some QuickBooks company files already include this non-taxable sales tax code.|
|NPO||NON-PROFIT ORGANIZATIONS. Such organizations are not charged sales tax, even if the products and services you sell are taxable. NPO would be assigned to a customer.|
|GOV||GOV. Sales to government offices, which are not taxed.|
|WHL||WHOLESALERS. Customers who are simply reselling the goods they buy from you.|
|RSL||RESELLERS. Customers who are reselling the products they buy from you or who are using your products to create a product of their own, which they then sell.|