How do I record use tax for a purchase from outside of our state?

Hi @CH721,

You can go to the Chart of Accounts and create a new liability account called use tax payable. This will track the amount you owe in use taxes. Then go to Lists ---> Item List, then create a new service item called Use tax and assign it to the Use Tax Payable account you just created.

When entering the purchase from the vendor in Enter Bills or Write Checks, enter the purchase amount as normal. Add a second line for the use tax item, then enter the tax amount you owe calculated based on your local use tax rate. When it’s time to pay the use tax to the state, go to Pay Bills or create a check for the amount due from the Use Tax Payable account.

This process will ensure that the use tax is properly tracked and reported on your books. Make sure to check your state's use tax reporting requirements to ensure compliance.

I hope this helps you to do this task

Hello there, CH721. I can help you accomplish your goal regarding recording the use tax purchase.

I agree with GilbertFox33's recommendation. Setting up a liability account for use tax payable and creating a corresponding service item is a practical approach to tracking and managing use tax. This method ensures that the use tax is accurately recorded and reported.

To create a liability account:

1. Navigate to the Gear icon and select Chart of accounts.
2. Select the liability account from the Account Type and Detail Type drop-down menu.
3. Enter the necessary field.
4. Click on Save and close.

Then, create a service item to track and manage use tax. Here's how:

You can also consider consulting with a tax professional for more specific guidance or other options to ensure everything is accounted for properly.

If you have any other questions about managing your account, you can post them here. I'll be right here to assist.