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Experienced Member

Tax-Included Item Pricing

I'm wondering if it's possible to program items to be tax-included. 

 

For instance, I want my customers to pay $4.00 for a bunch of carrots (tax included). This means that the carrots actually cost $3.87 with a tax amount of $0.13 (3.475% sales tax). But I list them at $4 (tax included).

 

Is it possible for me to enter the total price of an item in QB with the tax included (not separate) in an invoice or a sales receipt? 

 

For example, after I sell produce at the farmers market, I have collected cash for sales (including tax). All of my products are sold at prices with tax included. Can I enter to total amount collected and have the tax calculated from within that number not as an addition? Thanks. 

7 Comments
QuickBooks Team

Re: Tax-Included Item Pricing

Thanks for joining us here, hartbeetfarm. 

 

Please contact our phone support for QuickBooks Dektop for Mac so they can help with your sales tax. Here's how to reach out to them:

 

  1. Open this link: https://help.quickbooks.intuit.com/en_US/contact.
  2. Select QuickBooks Desktop for Mac
  3. Click Using QuickBooks for Mac.
  4. Click Get Phone Number

You can always visit us again in the Community if you have other questions. 

Established Community Backer ***

Re: Tax-Included Item Pricing

No

though asked for repeatedly, QB does not do sales tax included

Senior Explorer ***

Re: Tax-Included Item Pricing

Could you accomplish this with a Discount Item? (Maybe I haven't thought this through...Rustler you have more experience with this question, so please point out if I've missed something.) See the attached file, along with these descriptions...

 

Daily Cash Receipts are your total tax-included sales.

Tax-included Discount is a Discount-type Item which adjusts the taxable amount.

Subtotal is optional, but shows what the actual sales-taxable amount is.

 

Assuming a tax rate of 3.475%, the percentage for the Tax-included Discount Item is calculated this way:   1 - (1 / 1.03475) = 3.3583%

 

Whenever your tax rate changes you will have to re-figure the discount Item's amount. For a tax rate of 4% for example, the calculation would be: 1 - (1 / 1.04) = 3.84616%

 

I would set up both Daily Cash Receipts and Tax-included Discount to post to the same Sales (income) account, so the total for that account will represent net taxable sales. But you could have them post to different income accounts if that makes more sense to you.

 

Senior Explorer ***

Re: Tax-Included Item Pricing

I thought I had answered on this topic, but not sure if my answer disappeared?  Sorry if this ends up being a duplicate post...

 

Maybe do this with a Discount-type Item?  (I haven't thought this through...Rustler, you have more experience with this question, so please point out if I'm missing some problem this may cause.)

Set up these Items to use on a Sales Receipt to enter sales (see the attached image as an example):

Daily Cash Receipts - for recording tax-included sales.
Tax-included Discount - for reducing tax-included sales by the sales tax amount.
Subtotal - for showing the net taxable sales amount on the Sales Receipt.

The discount percentage for Tax-included Discount is calculated this way:

1 - (1 / 1.03475) = 3.3583%

Whenever the tax range changes you will have to change this percentage. For a 4% tax rate the calculation would be:

1 - (1 / 1.04) = 3.384616%

I would set up Daily Cash Receipts and Tax-included Discount to both post to the same Sales (income) account, so the account's total will represent net taxable sales. But you might have them post to different income accounts if you prefer.