Client from Inventory

zeclassicfinery · ‎October 27, 2021

Hey QB community!

New upstarts here and we have a (hopefully) specific question. We buy and sell vintage/antique goods and have some items in inventory which we did not pay sales tax on because it was intended for resale. However, we would like to use some items as thank you gifts to some clients (within the $25 value limit). What is our order of operations to properly shift the items out of inventory, pay the proper sales tax, account for them in COGS and do the bookkeeping?

Thanks!

Rustler · ‎October 27, 2021

The sales tax you are talking about is called "Use Tax".

So first you have to have a way to track use tax owed, google for QBO use tax there are several ways to do it.

Then just sell the item to the customer for a zero sales price, that will take care of the COGS posting.

If you include the item at a zero sales price WITH the sale of another item, use tax does not have to be computed, tracked or paid - best way to do it IMO

View solution in original post

Rustler · ‎October 27, 2021

The sales tax you are talking about is called "Use Tax".

So first you have to have a way to track use tax owed, google for QBO use tax there are several ways to do it.

Then just sell the item to the customer for a zero sales price, that will take care of the COGS posting.

If you include the item at a zero sales price WITH the sale of another item, use tax does not have to be computed, tracked or paid - best way to do it IMO

zeclassicfinery · ‎October 30, 2021

Thanks! Clearly I was wayyyy overthing it

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