How do I add the tax paid to a vendor on a Purchase Order or Bill? Do I need to add another line? What category type would it fall under? Thanks!

Thanks for visiting the Community, cj5.

I can help you add the sales tax on a purchase order or bill.

To track sales tax on purchases, first, you'll need to create an Other Current Liability account. Then, use this liability account when creating a purchase order or bill.

Let me show you how:

To create an Other Current Liability account:

1. Choose the Gear icon at the top, then select Chart of Accounts.
2. Click the New button.
3. Select Other Current Liabilities under Account Type and Detail Type (refer to the first screenshot).
4. Enter a name and the needed details.
5. Click Save and close.

To create a bill:

1. Click the Plus sign icon and choose Bill.
2. Under Category choose the Other Current Liabilities account (refer to the second screenshot).
3. Enter the amount and the needed details.
4. Click Save and close.

Here's an article for more details: Track sales tax on purchases from vendors. This article is for QuickBooks Desktop however, the concept is the same for QuickBooks Online.

That information should get you back in order. I’d be glad to help if you have other questions while working in QuickBooks. Enjoy your day.

Although the title of the article the link takes you to says "Vendor" it is actually talking about how to set up a Liability account on tax collected from a Sale.  It sounds like  you're talking about Sales Tax you have paid to a Vendor on a purchase.

So is it safe to assume you are trying to take advantage of Itemizing and deducting Sales Tax Paid on your taxes?  Then it sounds like you want a simple Expense Acct for Sales Tax Paid, but I would really run this one by your tax accountant.

Sales Tax is a big GOTCHA for most cities and states, so be sure to fully review what you're doing and get the full approval of your accountant.  Once you're clear on what you can deduct, simple do a Split entry for any invoices you pay where you can deduct the tax and enter it into your "Sales Tax Paid" Expense Acct.   This will give you a clean list at the end of the Quarter and/or Year on what you've paid out in Sales Tax.

And if you charge Sales Tax in your business, I'd also be sure not to mix any of your deductions with the Sales Tax you have collected.  One is a Liability you owe and the other is a potential expense you can write off on your income tax form.  But different tax departments are looking at only their pot and probably don't care if it washes out in the end.