You may be required to collect taxes for certain goods and services you offer. QuickBooks Desktop helps you keep an accurate record of these taxes so you can easily monitor and remit them to the appropriate tax collecting agency.
This article is part of a series on Sales Tax. It covers the usual sales tax workflow in QuickBooks Desktop.
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.
If you have inadvertently charged sales tax for a tax exempt customer, you can process a refund for them using one of the options outlined below. Contact your accounting professional to know which option works best for your business.
This option requires that you know your Sales Tax up to the point when you started tracking Sales Tax accurately. You can get this from the Sales Tax Liability report.
- Go to the Vendors menu then select Sales Tax > Adjust Sales Tax Due.
- In the Sales Tax Adjustment window, set the Adjustment Date to the date where you want to start tracking sales tax.
- From the Sales Tax Vendor drop-down, choose the sales tax agency you pay sales tax to.
- Set the Adjustment Account. Note that it should be an Expense account as you will be reducing sales tax.
- In the Adjustment box, make sure Reduce Sales Tax By is selected, then enter the amount of Sales Tax to be adjusted. (This will be the value you have from the Sales Tax Liability report.)
- In the Memo field, enter a note about the adjustment. Example: Adjustment to zero out the sales tax.
- Select OK to finish.
- Pay sales tax.
- From the Vendors menu, select Sales Tax then Pay Sales Tax.
- Select the Bank Account, Check Date, Show Sales Tax Due Through, and Starting Check No.
- Put a check mark on the Sales Tax Due and the Sales Tax Adjustment showing in the list. Note that they zero out each other.
- Check your Sales Tax Liability report and the sales tax up to that point will now be zero.