Sales Tax Liability

I can share some information regarding sales tax, Mdmx1324. 

Before we proceed, please note that QuickBooks Online (QBO) calculates taxes based on the customers' sales tax-exempt status, the location of the sale or shipment, and the sales tax category of your service or product. If any of your customers or products/services are subject to taxes, the overall taxable percentage will increase.

Additionally, it's best to verify that it is set up correctly by going to the customer's profile or the Products/Services menu for the specific product or service. 

Kindly follow these steps:

For Products/Service profile:

1. Go to the Sales menu, then choose the Product & Services tab.
2. Under the Action column, click Edit.
3. Scroll down and see the Sales tax section.
4. You'll see Taxable or Non-taxable, according to what you've chosen as you set up the item.
5. You can click X to exit.

For Customer's profile:

1. Go to the Customer's & Leads, then double-click the customer's profile.
2. Check within the customer's information if you correctly set up your customer as tax-exempt or not. This is according to your preference.
3. Click X to exit.

After verifying that everything is set up correctly, it's best to check your transaction. By doing so, we can check if the Tax column is correctly ticked.

When it's verified that everything is set up correctly and transactions are properly ticked or unticked, it's best to contact our support so they can check why this is happening on your end. Kindly refer to this article: QuickBooks Online Support.

To learn more about sales tax, check this article: Sales tax in QuickBooks Online.

Furthermore, you can access this material to edit your sales tax rate: Edit sales tax rate in QuickBooks Online.

I'll be here to help you so please let me know if you have additional concerns regarding Sales Tax, Mdmx1324.

@IrizA  Would you like to try again, only this time, after reading the OP's question instead of their title?

Thank you for your reply.  We only have one level of sales tax.  We do landscaping in one state.  All of our services are set up properly for sales/non taxable sales.  All of our customers are set up correctly for the state sales tax percentage.

After one quarter, the Sales Tax Liability Report does not accurately reflect the non taxable sales for the quarter. I have drilled down on the figure for non taxable and it shows the entire sales list for the quarter, not just the non taxable sales.  It also is overstated by about $7k.  After going through every invoice on that list, it is clear it is not reflecting the accurate amount which in this case is $1330.17.  

So, my question is back to where is the Sales Tax Liability Report pulling the information from for the "non taxable" sales?

Thank you.

@Mdmx1324 

On your Sales by Customer Detail Report, are all Transaction Types either Invoices, Sales Receipts, or Credit Memos?  Recording sales any other way can cause discrepancies.  You had another post about customer deposits showing up as "Unapplied Cash Payment Income".  That could certainly be the issue.  Post a screenshot of the two reports if you can - with any identifying info removed of course.  

We appreciate you bringing this matter to our attention, Mdmx1324. We want to address this sales tax amount issue in the Sales Tax Liability report promptly so you'll get accurate tax data.

The Sales Tax Liability report extracts non-taxable sales from your invoices and various sales transactions that include non-taxable sales. However, we've been receiving similar cases where users like you seeing incorrect taxable amounts on this report (INV-113680). Rest assured that this case is currently being worked on with utmost urgency.

In keeping with this, I'd recommend contacting our Customer Care team so they can gather more details and come up with a fix. Additionally, you will be included in the list of affected users and receive regular updates on the progress. To do this, here's how:

1. Go to the Help (?) menu.
2. Select the Search tab.
3. Click the Contact Us button.
4. Select a topic in the What can we help you with? page.
5. Choose a way to connect (Have us call you or Chat with us). 

Additionally, whenever you're ready to track your sales tax payment and check your filing status, you can go over this article: File and record your sales tax return in QuickBooks Online.

If there's anything else you need or you have other sales tax and reporting concerns, please don't hesitate to leave a reply below. I'm always ready to help.

Thank you very much for your response.  

I have figured a way to get all the numbers from reports that I can reconcile to invoices, and we are comfortable with filing our sales tax to the state.  The only issue I have now is how do I make a journal entry to the sales tax liability account to bring it up to the correct liability numbers? 

Thank you for your time.