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LZip23
Level 2

Sales tax not collected for Cash basis company

How do you account for sales tax owed for cash basis business when sales tax was never collected from customer? I can't reduce sales because sales tax was never collected. Which accounts do you journal? Please advise.

2 Comments 2
Rustler
Level 15

Sales tax not collected for Cash basis company

Sorry that I can not help with your question, but

 

I hope you have checked with your state comptroller to insure that sales tax can be reported and paid under cash basis.  I only know of three states that allow cash basis sales tax.  It makes no difference to the state how the company books are kept in the majority of the states. Good luck.

Rainflurry
Level 13

Sales tax not collected for Cash basis company

@LZip23 

 

Contact your state sales tax agency.  Most states have provisions for a credit or refund for uncollectible amounts but they differ by state. 

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