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Level 1

Progress Invoicing & Sales Tax

I need to accept a progress payment on a project I am working on. At the point where I deliver the product I have to charge sales tax but I cannot charge it until delivery. What is the best way to do a progress invoice and later collect the sales tax on the final invoice?

6 Comments 6

Progress Invoicing & Sales Tax

Let me help you collect the sales tax during the delivery of the product, RTLAuto.


You can add the sales tax amount when you create an invoice from the estimate. An estimate is a non-posting transaction, hence it doesn't affect any accounts.


Here's how to create a progress invoice from the estimate.


  1. Go to the Customers menu, then select Customer Center.
  2. Find and select your customer on the list.
  3. Open the estimate on the customer's page.
  4. Select Create Invoice from the toolbar.
  5. Decide how much you want to charge on the invoice, then OK.
    This image shows three options for how you much you want to create a progress invoice for.
  6. Fill out the rest of the invoice and make sure it's taxable.
  7. Once all set, save or send it to your customer.


In addition to this, use reports to keep track of your progress invoices. Here's how:


  1. Go to the Reports Center.
  2. Select the Jobs, Time & Mileage from the list.
  3. Scroll down to the Job Estimates section.
  4. Select Job Progress Invoices vs. Estimates.


If you need to check if the tax-collecting agency is correct, make sure to verify the code on the invoice. Check out this link for additional information: Collect sales tax.


You can get back to me if you have additional questions about the progress invoicing and collecting of sales tax. I'll be right here to help you.​​​​​​​

Level 1

Progress Invoicing & Sales Tax

What if I cannot collect sales tax during the building of the equipment and have to wait until final delivery/progress payment?


I have three progress payments and then the final payment.


Progress Invoicing & Sales Tax

Hello there, RTLAuto.


As mentioned by my colleague @MaryLandT, an estimate is a non-posting transaction and does not affect any accounts.


You'll want to wait until the final delivery before converting the estimate into an invoice.


Here's an article that you can check to learn about using progress invoicing: Set up and send progress invoices in QuickBooks Desktop.


For your future tasks, adding you some resources which you may find helpful: 


For other concerns about your QuickBooks account, please leave a comment below. I'm always here to assist. Have a wonderful day.

Community Champion

Progress Invoicing & Sales Tax

QuickBooks has an option to delay making sales tax due until you receive payment from the customer. However, it doesn't have one to further delay payment in the way you suggest.


In a way what you're describing seems implausible. What if, for example, the customer didn't pay the final invoice? Or didn't pay it for a long time. The implication is you'd never have to remit any sales tax to the state, or they could be delayed even by years.


While customers simply not paying may not be a plausible case for your business, generally states don't allow for such cases. Instead, state rules say you either owe the taxes when you recognize the income on an accrual basis or when you collect the money for and recognize it on a cash basis. I have never heard of the case where the state will let you delay paying taxes for a taxable sale where you've actually collected the money for the sale, or even part of the money.  The state thinks that's their money and they want it.

Level 1

Progress Invoicing & Sales Tax

The situation I am in is I produce projects that take an extended time. I do not recognize the income until the project ships but there are progress payments along the way to fund the construction.



Level 10

Progress Invoicing & Sales Tax

I'm with BigRed.  When you recognize income is not the same as when sales tax collection is required.  The only way to know for sure is to call your state's sales tax division.  I'd be shocked if you weren't required to collect sales tax on split payments.

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