What You'll Do Set Sales Tax Preferences Create a Sales Tax Item Create a Sales Tax Group Charge Sales Tax to a Customer Establish Tax Status of Inventory Items Sell Tax Exempt Items Sell Items to Tax Exempt Customers Produce Monthly Sales Tax Reports Pay Sales Tax Take a Discount for Early Payment If you sell items at retail and the items you sell qualify for sales tax, you are expected to collect sales tax from your customers at the time of the sale and remit that tax to the government on a timely basis. Because sales tax appears as a separate item on your invoice forms, you must set up a Sales Tax Item in QuickBooks to accommodate the presence of the tax on forms. After you've set up an item, the tax flows onto your sales forms so you can charge your customers for the tax. In some states, various goods are exempt from sales tax. New Jersey, for example, doesn't tax the sale of clothing. Illinois doesn't tax the sale of newspapers and magazines. QuickBooks enables you to specify which of the items you sell are subject to the tax and which are not. Some customers are exempt from sales tax. For those customers, QuickBooks gives you an option of exempting the customers or particular sales from sales tax. After you've collected tax, you are required to remit the tax to your state or local government. QuickBooks provides you with a form that summarizes your tax collections. You can use this form to calculate your sales tax, and then you can make your payment. You can also fill out your state sales tax form with the aid of a liability report and record an early payment discount in QuickBooks if your tax collection agency allows such a discount. |