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accounting-biena
Level 1

Does the state want to collect use tax for assembly service invoice charged?

Does the state want to collect taxes with use tax for meaning that,  If we only sell assembly, we do not collect sales tax because it is put into service during assembly. Sales tax is not collected from the customer. Since it is not a good, the previous step does not happen and we do not pay sales tax. Do we have to pay use tax?
2 Comments 2
eomerspider
Level 1

Does the state want to collect use tax for assembly service invoice charged?

I think you would need to talk to a CPA to get a good answer for this.

 

But I'm interested in this too.

JanbonN
QuickBooks Team

Does the state want to collect use tax for assembly service invoice charged?

Hello there @accounting-biena, welcome to the Community! I'd be happy to help you manage your taxes in QuickBooks Online (QBO). 

 

To determine if your products require use tax, it's necessary to consult with your state's guidelines or with your accountant. Each state has its regulations for use tax, and failing to comply with these guidelines can result in penalties and fines.

 

Since you're not collecting sales tax from your customers, you must also make the item non-taxable and customer tax-exempt.

 

Make an item non-taxable: 

 

  1. Go to Sales, then choose Product & services.
  2. Double-click the item you want to make non-taxable.
  3. Navigate to the Sales tax sections, then click Edit sales tax.
  4. Under Other options, tick NonTaxable.
  5. Click Done, then Save and close.

 

Make a customer tax-exempt:

 

  1. Go to Sales, then choose Customers.
  2. Double-click the customer you want to make non-taxable.
  3. Click Edit.
  4. Navigate to the Additional info section, then tick This customer is tax exempt.
  5. Choose the Reason for exemption * in the dropdown.
  6. Click Save.

 

Additionally, you can also set up a custom tax rate for other types of taxes.

 

Furthermore, you can also create a Non-Taxable sales report in QBO.

 

If you have any further concerns about your taxes, please don't hesitate to reach out to our Community. We are always here to help you out. Stay safe!

 

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