Sales Tax Liability Report for Pennsylvania is wrong. Non-taxable amount is understated by shipping allocated to exempt items
I've recently started collecting PA sales tax. When I went to file my latest return, I discovered an issue with the Sales Tax Liability Report. (FYI, shipping is 'generally' taxable in PA).
We had a sale in which the customer bought a taxable item and a non-taxable item. According to PA, the shipping for the order should be allocated between the taxable and exempt items. A simple example: Customer buys a bumper sticker (taxable) for $1, a shirt (tax-exempt) for $9, and pays $4 for shipping, for a total order of $14. In this example, $0.40 of shipping would be allocated to the taxable item ($1/$10 x $4), and the remaining shipping of $3.60 would be allocated to the tax-exempt item.
QuickBooks correctly calculates the sales tax on the sale. The problem is the reporting.
Assuming this is my only sale, I would expect that the Sales Tax Liability Report (STLR) would show the following:
Gross Amount: $14.00
Non Taxable Amount: $12.60 ($9.00 + $3.60)
Taxable Amount: $1.40 ($1.00 + $0.40)
Tax: $0.08 (6% x $1.40)
Instead, the STLR shows the following:
Gross Amount: $14.00
Non Taxable Amount: $9.00
Taxable Amount: $5.00
Tax: $0.08
As you can see, the Gross Amount and the TAX are the only correct figures shown in the current iteration of the Report. As should be obvious, I can't use this report to file my Pennsylvania tax return.
The bigger problem is that I file my PA taxes quarterly, and I don't have just one sale to PA in a quarter. So now, in order to calculate the correct Non-Taxable and Taxable Amounts, I have to create a spreadsheet to track my orders, and then I have to open every single sale to PA in order to allocate the shipping between taxable and non-taxable.
NOTE: I'm not sure how the system would report the Taxable and Non-Taxable Amounts for a sale of only exempt items as this hasn't happened for me yet.
This is a MAJOR flaw in the report and the work around is a HUGE waste of time!
Unfortunately, I don't expect it to be fixed, so now I'm having to rewrite my sales tax procedures to compensate for Intuit's poor programming skills (yet again).