How to debit the Sales Tax Payable account

Hi kt1100,

I'm here to enlighten you as to why the sales tax payable account is increasing.

When you record tax payments, it is advisable to use the Pay Sales Tax window. Writing a check will cause you to increase your liability since it will not affect the liability account. To fix it, you'll have to reenter those tax payments. I'll guide you through the steps.

First, let's back up your QuickBooks file so we can restore it if ever you run into problems.

Second, find the incorrect sales tax payments through the Bank Register page. Then, let's reenter those payments. Here's how:

1. Click the Vendors menu.
2. Under Sales Tax, select Pay Sales Tax.
3. If you have more than one checking account, choose the one you want to use for these tax payments in the Pay From Account. Then, review the Ending Balance.
4. In the Check Date field, enter the date of the sales tax payment. Start with the oldest payment first.
5. Under Show sales tax due through, change the date to the end of the payment period in question.
6. In the Starting Check No. field, type the check number used in the original payment.
7. In the Pay column, check to select the items you want to pay.
8. If you need to change the amount for any of the items, select the amount in the Amt. Paid column, and make the change.
9. Verify that the total amount matches your original payment, then select OK.
10. If the system prompts you with a Problem: Another Check already has number [xxx]... message, select Keep Number. 

Then, repeat steps number 2 to 10 for each payment before proceeding.

Afterward, let's remove the original payment transaction from other areas in QuickBooks. Here's how:

1. From the Lists menu, select Chart of Accounts.
2. Double-select the bank account you used when you re-enter the payment.
3. Scroll to the date of the sales tax payment to change. (You should see the entries near each other since both the original and the re-entered payment are the same.
4. The re-entered payment will be a TAXPMT type. If the original payment already cleared your bank account, put a checkmark on the TAXPMT entry then select Record.
5. Select the original sales tax payment.
6. On the Edit menu, select Delete Check.

Then, repeat steps number 3 to 5 for the rest of the payments.

Once done, you can run these reports to verify that the issue is solved:

• Sales Tax liability report - run the report through the current date and compare it against the balance of your Sales Tax Payable account.
• Vendor Balance Detail report - check the vendor balances for each tax agency
• Transaction List by Vendor report - to ensure there are no duplicate payments.

Furthermore, I've added this article on how you can handle cash basis sales tax: Handle cash basis sales tax.

I'm always around whenever you have concerns about recording sales tax payments.