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Level 1

Weekly Rental - Invoices cross sales tax reporting periods

Hi everyone,

 

I have a short-term rental where I have to file as businesses and charge sales/occupancy taxes. I have setup a tax group and the invoicing works well, usually a week or weekend for each guest/invoice.

 

I want to know how to handle tax reporting when a guest stays across month or quarter end. For example, I invoice on 6/29 for stay of 6/29 through 7/6. Our sales tax has to be filed monthly and paid quarterly, so ending 6/30 would include 6/29 and 6/30 in those filings even though they are just a part of the customer's invoice for a full week.

 

Any easy way for Quickbooks to figure this out easily so I can tally up by month/quarter for filing purposes? Right now the entire invoice is falling in the reporting period.

 

I'm in NJ. If anybody knows if I should not be reporting it this way and SHOULD be reporting the entire sale please lmk.

 

Any help is appreciated, these new taxes are driving me nuts!

 

Joe

Solved
Best answer May 01, 2019

Best Answers
Highlighted
Anonymous
Not applicable

Weekly Rental - Invoices cross sales tax reporting periods

I don't think you really need any special handling.  Sale tax is due, in most all cases, based on the sale date, or based on the payment date ('cash basis') in some cases.

 

The fact that you provided a service for the sale, and the service spanned two reporting periods is probably not a factor.

 

For example, if you created a sale in June, then the sales tax is likely due in June, even if you don't deliver until July.  The most likely case is that your state will want their money based on that invoice date, or on the payment date. 

 

If the payment date, then run your sales tax reports on a cash basis and QB will automatically pro-rate the tax based on when you get paid.  If you get paid in two periods for the sale, then you will owe part of the tax in each period.  (My impression is that this is uncommon.)

View solution in original post

9 Comments
Highlighted
QuickBooks Team

Weekly Rental - Invoices cross sales tax reporting periods

Thanks for reaching out to us today, @BeachCrazy.

 

I can help you run a report that will help you track the taxes you need to pay in a specific month. Let's work together in running and customizing the Sales Tax Liability report. 

  1. On the top menu, click Reports.
  2. Choose Vendors and Payables.
  3. Select Sales Tax Liability.
    1.JPG
  4. Modify the date period.
  5. Set the account preference to Accrual.
  6. Click Refresh.
    2.JPG

The report will provide the total amount of tax collection. Once you have the data, you should be able to pay the sales tax in no time, @BeachCrazy.

 

If you have other report questions, just leave a comment for me. I'm still here to help you more.  

 

Highlighted
Level 1

Weekly Rental - Invoices cross sales tax reporting periods

@HoneyLynn_G thanks for the reply! I do need some more help though, I probably didn't explain my particular problem clearly enough.

 

In my example, I have invoiced the client for their weekly rental stay from 6/29 through 7/6. Our sales tax has to be filed monthly and paid quarterly, so the quarter ending 6/30 should include sales tax for the dates of 6/29 and 6/30 only, not for 7/1 through 7/6. The invoice is for 6/29 - 7/6 as that is what the client is renting.

 

In the reports the ENTIRE week's sales tax is included in the report for the quarter ending 6/30. However only two days' worth of sales tax should be in the report, and the rest of the sales tax for the remaining days should be in the following quarter's report.

 

Thanks,

Joe

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QuickBooks Team

Weekly Rental - Invoices cross sales tax reporting periods

Hi there, Joe.

 

The best way to handle this situation is to create another invoice for 7/6. This separates the monthly reporting for your sales tax.

 

For example, you create an invoice for 6/29 to 6/30. You can file the sales tax for June without affecting the month of July. 

 

If you have any additional questions or concerns, please leave a comment. Thank you.

Highlighted
Level 1

Weekly Rental - Invoices cross sales tax reporting periods

Thanks for the reply @RenjolynC. I guess I always knew that was an option, but since I use Quickbooks to generate the invoice I email to the guest this solution is pretty confusing for both me and the guest.

 

I would need to apportion the entire stay myself manually between the two invoices, including fees like cleaning fees. Then I generate two separate invoices that I email to the guest. For example, my weekly cleaning fee is $125, but now it would be 2*$17.86 on one invoice and 5*$17.86 on the other, and of course with rounding that comes to $125.02 for the cleaning fee.

 

Is there any way to do "shadow accounting" for this where I can still generate a single clean invoice for the guest that they would understand?

 

Thanks,

Joe

Highlighted
QuickBooks Team

Weekly Rental - Invoices cross sales tax reporting periods

We can create one invoice for emailing purposes, BeachCrazy. 

 

After the invoice has been sent to your customer, we can then modify the invoice by separating them into two. This is for your reporting purposes already.

 

In addition, you can add a Description or Memo to help you identify what you've made to these transactions. 

 

Let me know if you have further questions. I'll be around if you need help! 

Highlighted
Anonymous
Not applicable

Weekly Rental - Invoices cross sales tax reporting periods

I don't think you really need any special handling.  Sale tax is due, in most all cases, based on the sale date, or based on the payment date ('cash basis') in some cases.

 

The fact that you provided a service for the sale, and the service spanned two reporting periods is probably not a factor.

 

For example, if you created a sale in June, then the sales tax is likely due in June, even if you don't deliver until July.  The most likely case is that your state will want their money based on that invoice date, or on the payment date. 

 

If the payment date, then run your sales tax reports on a cash basis and QB will automatically pro-rate the tax based on when you get paid.  If you get paid in two periods for the sale, then you will owe part of the tax in each period.  (My impression is that this is uncommon.)

View solution in original post

Highlighted
Level 15

Weekly Rental - Invoices cross sales tax reporting periods

@BeachCrazy 

 

Sales tax liability is based upon the invoice date, not the date of service or in this case rental.

 

Highlighted
Level 1

Weekly Rental - Invoices cross sales tax reporting periods

Wow thank you everyone. The state started charging these ridiculous fees starting October 1st, and they specifically used an example of someone's stay crossing that line and how they would be charged only for the sales tax that fell on October 1st and later, so I assumed that would be how all the quarters would be. I will reach out to the state to get a definitive answer on this.

 

Thanks again everyone for your help!

Highlighted
Level 1

Weekly Rental - Invoices cross sales tax reporting periods

So thank you to everyone that answered my question, but this turns out to be the real answer. I contacted the state department of taxation and they said that the entire tax would be payable in the month/quarter of the "sale" even if the stay extends into a different month/quarter. Therefore I do not need to split up taxes by days per the tax payment schedule. What a relief!

 

Thanks again to all that answered.

 

Joe

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