I sell new tires in california I need to collect the $1.75 fee for each new tire sold How can I add this to my sales receipts and also record it as a tax and not income

Thanks for reaching out to the Community, rickmartinez-fir.

I'm here to help share some insights on how to handle this in QuickBooks Online.

You'll have to create a service item for the fee and make sure that the income account of the item is California sales tax in the COA agency. 

To create a service item:

1. Go to Sales.
2. Select Products and Services.
3. Click on New.
4. Choose the Service item.
5. Enter the item information.
6. Click on Save and Close. 

For more information, please click here.

Also, I'm adding some resources concerning managing sales tax in QBO for additional reference:

• Set up your sales tax in QuickBooks Online.
• Manage sales tax payments in QuickBooks Online.
• Edit sales tax rate in QuickBooks Online.

Stay in touch with me on how everything turns out by commenting below. I'm always right here to help.

Hi thank you for the quick response I just tried creating it the way you explained and I got this message.

You cannot use this account to create items as the account is used by system to track the tax amount

Thanks for getting back to us, rickmartinez-fir.

You can use another account to track the service item. After that, you enter a journal entry (JE) to move the fees to the California sales tax account.

However, using this method (JE) needs the assistance of an accounting professional for the accounts you need to use.

They'd be able to help and guide you on which account to debit and credit as well as what account type to use to track your service items.

Here's to enter a JE:

1. Click + New in the left panel.
2. Choose Journal entry. Or, if you're in Business view, switch to Accountant view first. Then come back to these steps.
3. Fill out the fields to create your journal entry.
4. Hit Save and close.

Additionally, I recommend visiting this link: Account Management. These will provide links about managing your QBO account, income, expenses, inventory, and running reports.

If there's anything else I can help you with, please let me know. I'd be more than willing to lend you a hand.

so either way I would not be able to set it up on my end correctly without an accountant?

I appreciate you for getting back to us, rickmartinez-fir.

You can still set it up, however, we strongly recommend reaching out to your accountant to avoid messing up your account.

You can also look for an accountant through this link: Business is better with a ProAdvisor.

You can also check this link for some guide and tips in managing your QuickBooks account. Keep safe!