Sales Tax on Cash Basis AND Accrual Basis

Ensuring you meet state tax laws and regulations is essential to your operations, Annette. Let me share some details about recording sales tax payments in QuickBooks Desktop (QBDT) Enterprise.

Sales tax is paid to the state, which determines whether you should use the cash or accrual method for accounting. Businesses using the cash basis record revenue when they receive payment, not when the sale occurs. In contrast, the accrual basis records revenue when the sale happens, even if payment has not yet been received.

You can switch between cash and accrual methods on the Sales Tax Liability report to determine how much you owe. However, the program currently only allows you to record a sales tax payment using either method at a time, not both.

We understand the convenience of recording sales tax payments using both accounting methods. To improve your experience, we encourage you to submit a product request to our developers. They review and consider these requests for future updates.

Here's how to send a feedback:

1. Open your QBDT program.
2. Click the Help option, then select the Send Feedback Online option.
3. Toggle to the Product Suggestion field and a pop-up window will display.
4. Write brief suggestions for your feedback.
5. Hit the Send Feedback button to send.

Additionally, tax professionals or accountants can help you choose the best accounting method for your business. Seek their guidance to ensure accurate financial reporting and tax compliance. If you don’t have an accountant, you can find one by scanning this webpage: Find a QuickBooks ProAdvisor.

On the other hand, I'll include this article about personalizing your reports in QBDT to meet current financial needs: Customize reports in QuickBooks Desktop.

Let me know if you have other QuickBooks concerns about cash and accrual. I'm always here to lend a hand. Take care and more power to your business!

RE: Is there any way in quickbooks to pay one state on Cash Basis and one state on Accrual basis? 

The pay sales tax feature always uses the current tax preference (cash/accrual), and so the only way to have it calculate the amount to pay both ways is to change the preference between making the payments, which is rather a quick thing to do.

However, if you don't want to do that, you can use the sales tax report to determine the amount to pay, then create the payment for that amount (you may need to edit the payment after creating it in order to to increase the amount beyond what the pay sales tax feature thinks you owe; I'm not sure.)

@AdonL  RE: Businesses that operate on a cash-based prefer the Cash basis method as it allows them to recognize revenue when they receive payment rather than when the sale is made. 

This business's selected accounting basis has does not dictate their sales tax payment basis.

Sales tax is paid to the state based on the state's rules, which may dictate either cash or accrual, and which may not offer a choice. They often dictate cash, because otherwise you'd be required to pay tax on sales where you haven't yet received any money, and may actually never receive the money - or they oddly separate the sale from the invoicing period (when the taxes are due), presuming that there are two events.