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Frequent Contributor *

Sales Tax in Florida

We are a warehouse and manufacture and sell boat accessories.  The sales Tax here in Florida is 7%.  If any sale is over $ 5,000 the sales tax amount is 6%.  I need help setting the two amounts in quickbooks and how will quickbooks no to calculate the correct tax amount?  thankyou

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Best answer 12-20-2018

Accepted Solutions
BRC
Established Community Backer ***

Re: Sales Tax in Florida

In Florida for some sales, while the overall 5% sales tax rate applies to the entire sale, the local tax (1% - 2%) applies only to the first $5000 of the sale.

 

This can be set up in QB, but it is tricky.

 

In order to set this up, you'll need two tax items, one for the state tax and one for the local tax.

- For any sales under $5000 you can also set up a sales tax group that contains both items and use it on the bottom of the invoice as normal for a group tax item.

- For sales over $5000:

1) Create a taxable other charge and call it something like Adjustment for Local Tax (or whatever you fancy.)  Set it's rate as $5000.

2) Create a Group item (not a sales tax group, but a regular group.  The Group will have three items:

Adjustment for Local Tax: Qty 1

Fl Local Sales Tax item

Adjustment for Local Tax: Qty -1

Note the option to print or not print detail on the item.  Don't print the detail.

Cleverly name the group something like "FL - Local Tax 1%" and give it a description something like "FL - Local Tax 1% - first $5000"

 

3) When making a sale, first enter the sale details, then use the group you've set up in step 2 and use the 5% Florida tax at the bottom of the invoice.

 

The resulting invoice will apply $5000 taxable sale to the 1% tax and the entire sale to the tax at the bottom of the invoice.  The invoice total will automatically be correct and the sales tax report will also be correct:

 

The invoice when printed will hide the details of the group:

 

 

Capture.JPG Capture2.JPG

 

 

 

15 Comments
QuickBooks Team

Re: Sales Tax in Florida

Hey there, Stayseea.


Thanks for visiting the QuickBooks Community. I'll be your guide today in setting up the Florida sales tax.


Currently, the desktop version doesn’t have the option to automatically change the rate when it reaches the sales tax limit. For the software to start using the new rate, you have to set it up and enter it when creating invoices.


When setting up the sales tax, make sure to first turn on the Preferences. For the step by step process, follow these steps:

 

  1. Go to Edit at the top menu bar.
  2. Select Preferences.
  3. Click on Sales Tax on the left panel.
  4. Under the Company Preferences tab, select Yes.
  5. Click on Add sales tax item.
  6. In the New Sales Tax Code window, enter the code.
  7. Then assign a sales tax rate and tax agency.

To create a new sales tax item:

  1. Select Sales Tax in the drop-down.
  2. In the Sales Tax Name field, enter your preferred name for the tax item. It is advisable that you use the location of tax for the name
  3. In the Tax Rate (%) field, enter the 7% or 6%.
  4. In the Vendor Name field, enter the name of your tax agency. For example, the Florida Department of Revenue.
  5. Click on OK.

I've attached an article that will visually guide you through the steps: Set up sales tax.

 

With these steps, you can effectively track the Florida sales tax. 

 

If you additional questions about QuickBooks, reach out back to me. I'll be around to answer them. Have a great day ahead.

BRC
Established Community Backer ***

Re: Sales Tax in Florida

The tax has a higher rate on the first $5,000 of a taxable sale, and then drops down - because the local tax is limited.  Setting up two tax items to pick between will not work.

http://floridarevenue.com/taxes/taxesfees/Pages/sales_tax.aspx

BRC
Established Community Backer ***

Re: Sales Tax in Florida

In Florida for some sales, while the overall 5% sales tax rate applies to the entire sale, the local tax (1% - 2%) applies only to the first $5000 of the sale.

 

This can be set up in QB, but it is tricky.

 

In order to set this up, you'll need two tax items, one for the state tax and one for the local tax.

- For any sales under $5000 you can also set up a sales tax group that contains both items and use it on the bottom of the invoice as normal for a group tax item.

- For sales over $5000:

1) Create a taxable other charge and call it something like Adjustment for Local Tax (or whatever you fancy.)  Set it's rate as $5000.

2) Create a Group item (not a sales tax group, but a regular group.  The Group will have three items:

Adjustment for Local Tax: Qty 1

Fl Local Sales Tax item

Adjustment for Local Tax: Qty -1

Note the option to print or not print detail on the item.  Don't print the detail.

Cleverly name the group something like "FL - Local Tax 1%" and give it a description something like "FL - Local Tax 1% - first $5000"

 

3) When making a sale, first enter the sale details, then use the group you've set up in step 2 and use the 5% Florida tax at the bottom of the invoice.

 

The resulting invoice will apply $5000 taxable sale to the 1% tax and the entire sale to the tax at the bottom of the invoice.  The invoice total will automatically be correct and the sales tax report will also be correct:

 

The invoice when printed will hide the details of the group:

 

 

Capture.JPG Capture2.JPG

 

 

 

Frequent Contributor *

Re: Sales Tax in Florida

Thank you for getting back to me.  My problem is, here in Florida, there are two rates.  One being After $5,000 6%.  Less than $5,000 would be 7%,  If I have one line item or service that's let's say $6,500, how would I add the taxes without the invoice looking like a mess?  Thanks

Frequent Contributor *

Re: Sales Tax in Florida

Thank you if can explain the set up, I'd appreciate it.  My problem is going to be more when I have a sale that's $6,500 on one line item and the $5,000 has to be 6% and the remainder at the 7%.  Peachtree had a formula you can use.  Does Quickbooks have this?

QuickBooks Team

Re: Sales Tax in Florida

Hi there, @Stayseea,

 

Thank you for getting back and clarifying your concern. I agree and recommend the answer provided by BRC in setting up sales tax for Florida.


At this time, you have to create two tax items to follow your state mandate. Intuit's goal is to provide our customers with the best experience and cater to the needs of each business. Your suggestions on how we can improve and make it better can help us achieve it. 

 

Please send your idea to our engineers to evaluate and consider this on future update:

  1. Click the Help menu bar.
  2. Scroll down to Send Feedback Online.
  3. Select Product Suggestion.
  4. Select Product Suggestion for the Type of Feedback.
  5. Product Area is optional.
  6. Enter your suggestion.
  7. Click Send Feedback.

Feel free to reach out back to me if you have other questions about QuickBooks. Wishing you all the best. 

BRC
Established Community Backer ***

Re: Sales Tax in Florida

RE: Thank you if can explain the set up, I'd appreciate it.

 

I think I did that in great detail on my post.  It will do what you are asking for. Reply

 

Not applicable

Re: Sales Tax in Florida

Hello!  I am trying to go through your steps and had a quick question:

In step one- can you explain in detail how you create a "taxable other charge"?

Thank you so much!

 

QuickBooks Team

Re: Sales Tax in Florida

Hi there, radley.

 

It would be my pleasure to lend a hand with creating a taxable Other Charge Item in QuickBooks Desktop.

 

Here's how:

 

  1. Go to the Lists tab at the top menu bar.
  2. Click Item List.
  3. Click the dropdown arrow next to Item.
  4. Click New.
  5. Below Type, select Other Charge.
  6. Below Item Name/Number, enter a name (ex. Adjustment for Local Tax).
  7. Below Tax Code, choose Tax.
  8. Click OK.

Please feel free to get in touch with me here for any additional questions. The Community always has your back.

 

Frequent Contributor *

Re: Sales Tax in Florida

I tried this out on a sample file and it did finally work.  Thank you

Not applicable

Re: Sales Tax in Florida

Thank you so much! 

I was actually able to get that far :-) so that makes me feel better I did that right, but  when you click OK, it asks for an "Account" and I wasn't sure what to pick.  What Account should this go with?

Thank you again!

QuickBooks Team

Re: Sales Tax in Florida

Hello everyone.

 

Happy to know that the steps provided by my colleague above were able to fix your concern.

 

Please know that our doors are always open here in the Community. Don't hesitate to add a post if you have any other QuickBooks concerns, I'm always here to help. Wishing you the best!

Not applicable

Re: Sales Tax in Florida

On the last step when you click OK, it asks for an "Account" what Account should this go with?

Also, we did this on an invoice and it is showing up on our sales tax liability for January but we pay on cash basis so it shouldn't be there because they haven't paid the invoice yet, how can we change this so it shows once it is paid on the sales tax liability?

Thank you so much!

Anonymous
Not applicable

Re: Sales Tax in Florida

Hello, radley.

 

You’ll need to consult your accountant on which account to choose when setting up the item. Moreover, your Sales Tax Liability report could have been set to Accrual basis. You can change it to cash so it’ll only show paid invoices. Just select the Cash radio button on the upper left part of the report.

 

Please don’t be hesitant to reach us again if you anything else.

Frequent Explorer *

Re: Sales Tax in Florida

Good afternoon, I am having the same problem.  Which account did you go with?  Thank you

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