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pallc
Level 2

entering in sales tax that you already paid on purchase

Hello Everyone,

 

My company uses QuickBooks 2018 Premiere Desktop. I have a question on sales tax, as I am always a bit unsure of how to account for it. Am I doing this correctly? This is my current workflow:

 

  1. Technician purchases something from the store (say Home Depot)
  2. I receive the receipt from the technician
  3. On line one, I enter in the item name, the pre-tax amount (let's say for simplicity $50.00), and brief description
  4. On line two, I use the expense category "Sales tax", and I enter in the sales tax from the receipt (let's say $5.00)

So my QB expense window would look like:

 

Categorydescriptionamount
job expense: materialselectrical wire 50 ft50.00
expense: taxes paid: sales taxtax paid on invoice5.00
Solved
Best answer February 20, 2021

Best Answers
john-pero
Community Champion

entering in sales tax that you already paid on purchase

Unless you live in a state like North Carolina which does not recognize exempt for resale at time of purchase and for tge need of tax paid record in order to get a refund or apply it to collected taxes you are doing way more work than is necessary. The ultimate price you pay for something includes the tax. Enter only one line, $55.

 

If it was a larger, depreciate item, tax must also be depreciated at same rate as the item so that is why sales tax on a vehicle is included in the fixed asset, for example

View solution in original post

2 Comments 2
john-pero
Community Champion

entering in sales tax that you already paid on purchase

Unless you live in a state like North Carolina which does not recognize exempt for resale at time of purchase and for tge need of tax paid record in order to get a refund or apply it to collected taxes you are doing way more work than is necessary. The ultimate price you pay for something includes the tax. Enter only one line, $55.

 

If it was a larger, depreciate item, tax must also be depreciated at same rate as the item so that is why sales tax on a vehicle is included in the fixed asset, for example

View solution in original post

pallc
Level 2

entering in sales tax that you already paid on purchase

Thank you! This company is located and does business locally in Florida.  Thank you for the inclusion of depreciating the sales tax with the vehicle example.

 

Thank you for your help!

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