When I file the sales tax return and pay the full amount due on time, I received
a vendor collection credit. This credit reduces the amount due I send to New York State with the sales tax return. I made the adjustment in Quickbooks using the sale tax adjustment under the vendor menu. My question is this early payment credit taxable on the company income tax return?
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You can deposit the vendor credit you've received and use Other Income as its source account. Let me guide you in doing so.
You can read through these articles to learn more about managing your vendor-related transactions:
Feel free to leave a comment below if you have follow-up questions about recording refund transactions in QuickBooks. I'm always here to help.
The problem is its not actually 'received income' . Basically, if i owe $100 in sales tax to NY state but i file on time, they give me a 5% discount. So, i only have to pay $95. However the sales tax function in QB online thinks i need to pay $100. So i am trying to figure out how i can book an entry or something where i can show that even though i collected $100 in sales tax, and my NY state tax liability for the period is $100 i only need to pay $95 to the department of taxation and the other $5 i can recognize as income
I processed the payment in quickbooks for the amount of actual sales tax owed, then did a general journal entry that credited the vendor collection credit back to my checking account, and created an income account just for this titled "sales tax collection credit" to balance and keep track of it.