I'll share some information about how sales tax works in QuickBooks Desktop (QBDT), @kimforbes.
Sales tax is determined by the type of account and its scenarios. Since the business collects sales tax on behalf of tax authorities, the tax is not recorded as revenue.
For example:
You sell a helmet worth $100 and have a 10% sales tax. With this, you need to separate the tax from the gross amount. You will debit for $110, then credit sales for $100, and sales tax payable for $10.
Sales Tax = Total Sales x Sales Tax Rate
Sales Tax: 100 x 10/100 = $10
After collecting sales tax from customers, it becomes a liability for the business. The Sales Tax Payable is a liability account in the balance sheet that is used to track the sales tax collected from customers on behalf of the governing tax authority.
The business holds these funds and is liable for remitting them to the government on a timely basis. Also, I'd recommend consulting an accountant so they can explain this matter thoroughly.
For more information you can check this article: Set up sales tax in QuickBooks Desktop.
Additionally, if you want to keep track of and view the snapshots of your taxes in QBDT, you can pull up some reports and customize them with the information you need. See this article for guidance: How to run and customize reports in QuickBooks Desktop.
Let me know if you have other questions about managing your sales tax in QuickBooks Desktop. I'm always here to explain further.
