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samreg
Level 1

 

We sell to a few states where we have economic nexus - after the recent court ruling.

 

To get the correct amount of tax for items sold we utilize a service - which gives us back the city, state, district , county sales tax that we need to put into the invoice for the amount of product sold and the shipping address.

 

How would I enter this tax?

 

I was thinking of making Tax items - like MA-TAX, PA-TAX and so on - that would be a line item in the invoice, and putting in the amount that I obtained from the service.

 

I see that Quickbooks has the Smart Tax Calculator for QB online. I wish they had one for QB desktop.

 

To get the sales tax liability one would have to create a report that totals up the MA-TAX, PA-TAX items from every invoice for a given period.

 

I am new to all this - so the above is my conjecture on how one could approach this problem.

 

I am certain that others have solved this already - any help opr ideas would be appreciated.

Thanks

Sam

 

6 Comments
qbteachmt
Level 15

I think you are explaining that you Sell the real item as taxable, but you can change its status in each sale, no matter what is the status of the Customer name. Or, change the customer name, if Nothing is going to be taxable to them, even though the item has a Taxable default.

 

If you are trying to enter a negative item to Reverse something, that would be an Other Charge type item, as example:

Tax Holiday reduction, qty = tax rate as negative, and Rate = taxable amount you want to reverse.

samreg
Level 1

Thank you for your answer - but please let me clarify.

 

We sell to different states. 

Until July of this year, we did not have to collect tax for states where we did not have a physical presence.

But that has changed after a recent supreme court ruling.

Now we have to collect and remit taxes to states where we have "economic nexus" - where the rules are determined by the states.

 

So now we have to collect state and local sales taxes for other states, and since the local taxes vary based on shipping address, we have to use a realtime service to get the value of amount of sales tax to be collected, for a  set of real products, being shipped to a certain address.

 

After we get the tax amount we have to enter it into Quick Books - as in CA-TAX where we might get the total tax for a certain jurisdiction in California or WA-TAX - which would be different for Spokane washington and Bellevue Washington because they have diff local tax rates.

 

The question is - What is the best way to enter the Sales Tax that has been computed manually for a given transaction?

I know the shipping address is (for eg.) in CA - so I can choose the CA-TAX item and put in an amount. That is what I think my approach could be. BUT I could be wrong.

 

So if someone has implemented this economic nexus sales tax collection - in Quickbooks Desktop Enterprise - please let me know your approach.

Thanks

Sam

samreg
Level 1

Thank you for your answer - but please let me clarify.

 

We sell to different states. 

Until July of this year, we did not have to collect tax for states where we did not have a physical presence.

But that has changed after a recent supreme court ruling.

Now we have to collect and remit taxes to states where we have "economic nexus" - where the rules are determined by the states.

 

So now we have to collect state and local sales taxes for other states, and since the local taxes vary based on shipping address, we have to use a realtime service to get the value of amount of sales tax to be collected, for a  set of real products, being shipped to a certain address.

 

After we get the tax amount we have to enter it into Quick Books - as in CA-TAX where we might get the total tax for a certain jurisdiction in California or WA-TAX - which would be different for Spokane washington and Bellevue Washington because they have diff local tax rates.

 

The question is - What is the best way to enter the Sales Tax that has been computed manually for a given transaction?

I know the shipping address is (for eg.) in CA - so I can choose the CA-TAX item and put in an amount. That is what I think my approach could be. BUT I could be wrong.

 

So if someone has implemented this economic nexus sales tax collection - in Quickbooks Desktop Enterprise - please let me know your approach.

Thanks

Sam

qbteachmt
Level 15

In the listing of Charge items, you control what is taxable or not. You can set a Default for the item, but the important thing is to confirm it on each sale, if it varies.

 

Then, at the bottom, you see the assigned default sales tax or tax group for that Customer name, which you also should confirm and can change on each sale, if that varies.

 

For instance, I am in a No Sale Tax region, but if I have you make a sale to me as my California location, you can change the bottom to be "sales tax CA or CA group" item for this sale.

 

It isn't a Line item.

 

If you want to Turn off the sale taxes function in QB entirely, and manage it all manually, sure, that would be Items linked a liability account. And now you use None of the Sales Tax reports or functions in QB. But what you are asking is provided for. Never use two different system to compute sales taxes. Either use the QB functions and let QB manage this, or use it to make an entry from an outsourced source of reference, such as a Online Point of Sales.

samreg
Level 1

Hello

 

Are there any solutions that I can avail of that directly work with QB (you mentioned online point of sales) that we could use?

 

CUrrently what we are imagining is that we manually go to some website, run the transaction to get the tax (including local tax) - put it in manually into a liability item like PA-TAX, MA-TAX, CA-TAX etc. and then create special reports to get the total tax needed to be remitted to PA, MA, CA etc.

 

Otherwise you are confirming that the liability line item is the way to go.

 

Thanks

Sam 

qbteachmt
Level 15

Here is a method  called Sales Summary, which allows you to make and memorize a Sales Receipt as a Summary worksheet, then use it as a clerical task to fill in everything that needs to be accounted for:

Daily Sales Summary Desktop for Retailers by Long

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