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smorgan01
Level 3

Change inventory items to taxable

I purchased some items that I normally resale.  On this particular purchase I am using the items for R&D.  Since I normally resale this item I was not charged sales tax.  I am not going to resale this particular order so I need to change this inventory from the purchased items to taxable. The next time I pay my sales taxes I need this purchase to show as a taxable purchase.

Solved
Best answer February 07, 2022

Best Answers
Adrian_A
Moderator

Change inventory items to taxable

Hi smorgan01,

 

The tax on your purchases is paid and filed by your vendor, so we're unable to modify it and add a tax rate.

 

If you want to track the tax portion, you can add it to your transactions as another item.

 

You can check this with a tax advisor or accountant to ensure your tax reports are correct.

 

I've also added this link for more information about recording items: Add, edit, or delete items.

 

I'll be around if there's anything that I can help with recording taxes. Keep safe!

View solution in original post

5 Comments 5
Adrian_A
Moderator

Change inventory items to taxable

Hi smorgan01,

 

The tax on your purchases is paid and filed by your vendor, so we're unable to modify it and add a tax rate.

 

If you want to track the tax portion, you can add it to your transactions as another item.

 

You can check this with a tax advisor or accountant to ensure your tax reports are correct.

 

I've also added this link for more information about recording items: Add, edit, or delete items.

 

I'll be around if there's anything that I can help with recording taxes. Keep safe!

Rainflurry
Level 8

Change inventory items to taxable

@smorgan01 

 

Although you may carry this item in inventory, don't use the inventory item on the bill since this is an R&D expense, not inventory.  In the future, when the purchase is for R&D, create a bill for the expense (include sales tax as part of the R&D expense) but don't use the inventory item on the bill. 

 

For the previous purchase in which you were not charged sales tax, you can do a journal entry to record the use tax: debit R&D expense, credit sales & use tax payable.  This will properly expense the cost of the tax and add the amount to your sales tax payable for the next time you file your state sales & use tax return.

smorgan01
Level 3

Change inventory items to taxable

Thank you for the help.

smorgan01
Level 3

Change inventory items to taxable

Why would my Vendor pay my taxes on purchases that I am not reselling?

ZackE
QuickBooks Team

Change inventory items to taxable

Thanks for getting back with the Community, smorgan01.
 

Generally vendors pay taxes on the items they supply to a business for resale.
 

If you aren't certain, I'd recommend working with an accounting professional. If you're in need of one, there's an awesome tool on our website called Find an Accountant. All ProAdvisors listed there are QuickBooks-certified and able to provide helpful insights for driving your business's success.
 

Here's how it works:

  1. Go to our Find an Accountant page.
  2. In the Find an expert in section, choose what you're looking for, then use your search field to enter a City or ZIP code.
  3. Select Search.
  4. Browse through the results and find one that works best for your business. You can click on each ProAdvisor's profile to learn more information about them.

 

Once you've found an accountant, they can be contacted through their Send a message form:

  1. Use the available text box to introduce yourself. Be sure to include details about which services you're looking for.
  2. Enter your appropriate info in the Your nameYour email, and Your phone number (optional) fields.
  3. Hit Send message.


You'll also be able to find many detailed resources about using QuickBooks in our help article archives.

 

Please feel welcome to send a reply if there's any additional questions.

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