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QB/Accounting Newbie - How do I account for sales tax exemption on manufacturing equipment in QBO?

Hi all. Hope someone can help me understand this...I have bought manufacturing equipment for my coffee shop and my accountant told me that I am eligible for a sales tax exemption on this machinery. Can anyone tell me how to handle this in QBO? Thanks so much.

Solved
Best answer November 19, 2020

Best Answers
QuickBooks Team

QB/Accounting Newbie - How do I account for sales tax exemption on manufacturing equipment in QBO?

Welcome to the Community family, @mggee05.

 

I want to thank you for allowing QuickBooks to help you with your accounting needs. I'm your helping hand for today in getting this sales tax exemption concern taken care of.

 

You'll need to reach out to the store where you bought the manufacturing equipment so you can process the sales tax exemption of your purchase. This way, you'll be able to receive a refund for the tax that you've paid. In doing this, make sure to supply supporting documents for the exemption.

 

Once you received the refund, you can now create a vendor refund transaction in QBO. This will track the amount that you've got in the system.

To do that:

  1. Select + New.
  2. Press on Vendor credit. 
  3. In the Vendor drop-down, choose your vendor where you purchase the equipment.
  4. Depending on how you record purchases with this vendor, enter the Category details or Item details. Usually, this is the category, product, or service you’re getting a credit for. 
  5. Hit on Save and close.

After that, you can now record the amount that you received so it will be deposited into your expense account.

 

Here's how:

  1. Press on + New.
  2. Select on Bank Deposit
  3. In the Account drop-down menu, select the account where you got the refund.
  4. From the Add funds to this deposit section, fill out the following fields.
    • Received from: Select the vendor who gave you a refund.
    • Account: Select Accounts PayableImportant: You need to pick Accounts Payable so you can tie the refund to the vendor credit. This may seem a little strange, but it’s the best way to do this.
    • Payment method: Enter the method your vendor used to refund you.
    • Amount: Enter the amount of your refund. 
  5. Click on Save and close.

To give you additional insights on this process you can always visit this reference: Learn how to record a refund from a vendor in QuickBooks Online.

 

I got you covered if you have any other questions about this, @mggee05. Feel free to leave a reply below. Have a lovely day!

View solution in original post

1 Comment
QuickBooks Team

QB/Accounting Newbie - How do I account for sales tax exemption on manufacturing equipment in QBO?

Welcome to the Community family, @mggee05.

 

I want to thank you for allowing QuickBooks to help you with your accounting needs. I'm your helping hand for today in getting this sales tax exemption concern taken care of.

 

You'll need to reach out to the store where you bought the manufacturing equipment so you can process the sales tax exemption of your purchase. This way, you'll be able to receive a refund for the tax that you've paid. In doing this, make sure to supply supporting documents for the exemption.

 

Once you received the refund, you can now create a vendor refund transaction in QBO. This will track the amount that you've got in the system.

To do that:

  1. Select + New.
  2. Press on Vendor credit. 
  3. In the Vendor drop-down, choose your vendor where you purchase the equipment.
  4. Depending on how you record purchases with this vendor, enter the Category details or Item details. Usually, this is the category, product, or service you’re getting a credit for. 
  5. Hit on Save and close.

After that, you can now record the amount that you received so it will be deposited into your expense account.

 

Here's how:

  1. Press on + New.
  2. Select on Bank Deposit
  3. In the Account drop-down menu, select the account where you got the refund.
  4. From the Add funds to this deposit section, fill out the following fields.
    • Received from: Select the vendor who gave you a refund.
    • Account: Select Accounts PayableImportant: You need to pick Accounts Payable so you can tie the refund to the vendor credit. This may seem a little strange, but it’s the best way to do this.
    • Payment method: Enter the method your vendor used to refund you.
    • Amount: Enter the amount of your refund. 
  5. Click on Save and close.

To give you additional insights on this process you can always visit this reference: Learn how to record a refund from a vendor in QuickBooks Online.

 

I got you covered if you have any other questions about this, @mggee05. Feel free to leave a reply below. Have a lovely day!

View solution in original post

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