I completed a public works reconciliation with the State of Washington. As part of the reconciliation process it calculated the difference between total amount of the contract and the gross amount I have reported on our excise tax returns. The difference between the two is the pending retainage.
The state reconciliation then calculated the amount of sales tax due on the retainage and required I pay it in order to complete the process.
However, I still haven't received the retainage billed to the school district (the municipality involved).
Washington is a cash reporting state (you report when you collect) and I haven't 'collected' it yet according to Quickbooks (the invoice isn't recorded as paid).
So I have now paid the tax in advance of receiving it. The State of Washington is backlogged and hasn't yet posted the reconciliation I submitted over a month ago. And (on a related note) we need to reconcile our bank statement.
So now what? I paid the tax in advance of receiving it in the month of October. I won't actually receive those funds or post them in the normal way to QB until this month (November) if I'm lucky - once the State gets through their backlog and releases the retainage then the school district still needs to process our payment.
Is there a way to record the tax payment 'in advance' in QB so we can reconcile our bank account? And the payment needs to be recorded for a particular City. I've never run into this before and don't know what to do. Does anyone know the answer? Please help!!
