Usage (or Use) tax is imposed on purchases shipped to you from a different state than the one in which you have your business. Generally, this tax only applies to states that already have a sales tax. Its purpose is to equalize the tax burden when buying from in-state or out-of-state vendors. This article guides you through manually tracking Usage taxes in QuickBooks Desktop.
- Set up Out-of-State vendors.
- Go to the Lists menu > Customer & Vendor Profile Lists > Vendor Types List.
- Choose Vendor Type and then click the New button.
- In the Vendor Type field, type Outstate (or a similar name) and click OK.
- On the Vendors menu, select Vendor Center.
- Right-click an out-of-state vendor, and then choose Edit Vendor.
- Go to Additional Info tab then from the Vendor Type drop-down, select Outstate then click OK.
NOTE: Repeat steps 1d to 1f for each of your out-of-state vendor.
- Run a Transaction Detail report for each Use Tax time period.
- Go to the Reports menu > Accountant & Taxes > Transaction Detail by Account.
- Click Customize Report.
- On to the Filters tab, select Account from the Filters list.
- From the Account drop-down, choose Multiple Accounts.
- Select the appropriate payments accounts (this will limit the report to payments made to vendors) then click OK.
- Go back to the Filters list and select Vendor Type. From the Vendor Type drop-down, select Outstate then click OK.
- Multiply the report balance by the Use Tax percentage to find the total use tax owed to the tax vendor.
|IMPORTANT: If you require to pay Use Tax sales and Sales Tax on a single check, you can enter the Use Tax information in the Sales Tax Payable register. Make sure to use the correct tax vendor, amount, and expense account. When you are ready to pay both taxes, go to the QuickBooks Home page and select Manage Sales Tax > Pay Sales Tax.|