Sales tax paid to supply vendors for contractor work but some of the supplies are sold retail.
A flooring company buys tile and pays the vendor sales tax. When the product is used by the subcontractors to install, they don't charge the contractor. That part is fine. BUT some of the product is resold to individuals--i.e. boxes of tile. In this case they mark up the tile and charge sales tax. That is fine. All I need to do is remit the difference in the sales tax for the "upcharge" to the retail customer. How do I record all of this in quickbooks. Currently I have a line item "sales tax" expense so I know how much sales tax I have paid vendors that is just "part of doing business". But when I charge a retail customer in QBO, the sales tax goes to the sales tax liability account (all of it). I don't owe all of it, just the upcharge. So I know how to reduce the amount to the state (take my credit for taxes paid), but what proper entry to clear up the liability account, other than a journal entry to reduce liability and reduce "sales tax expenses". When I pay the state for the "difference", I am coding to "sales tax" expense, which probably should be "sales tax" liability. But that still doesn't resolve how to properly code this. And I don't like the new sales tax program.