I am creating credit memos for sales tax. My question to verify my thoughts is this. When making a credit memo for sales tax how would we code it? would the item code be "sales tax" or something else?
Let me give you a couple of scenarios and get your sales tax recorded.
If you need to adjust the sales tax amount you owe, you can create a sales tax adjustment.
If you charged a sales tax for a tax-exempt customer, you have options to process a refund.
Please refer to this article for the step-by-step instructions: Refund sales tax collected from tax exempt customers.
Additionally, when creating a credit memo, you can use the same sales tax code to match your original invoice.
I've also added this handy article for future help: Review sales tax reports.
Get back to me anytime if you have additional questions.