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Mdmx1324
October 28, 2024
Question

Sales Tax Liability

  • October 28, 2024
  • 1 reply
  • 0 views

Hi.  We have a major sales tax liability issue.  We have simple bookkeeping and accounting procedures.  We operate on a cash basis.  We create invoices and check each line item if it is taxable (90% of our services are taxable).  For the first quarter of 2024, I ran our Sales Tax Liability Report.  I have to reconcile these numbers to other reports.  I ran the Sales by Customer Detail report for the same period and same accounting method.  The total amount at the bottom of this report matches column one of my liability report, "Gross Total".  On this same report, the difference between the "Total" and "Taxable Amount" is $1330.17.  So, the "Non Taxable" column on the liability report should show this amount.  It doesn't.  It shows $8505.17.  A difference of $7175.  When I drill down on the non taxable items and spot check the invoices, they are marked as taxable!!!  My question is...where is QBO drawing it's data for the "Non Taxable" figure on the sales tax liability report? 

1 reply

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IrizA
October 28, 2024

I can share some information regarding sales tax, Mdmx1324. 

 

Before we proceed, please note that QuickBooks Online (QBO) calculates taxes based on the customers' sales tax-exempt status, the location of the sale or shipment, and the sales tax category of your service or product. If any of your customers or products/services are subject to taxes, the overall taxable percentage will increase.

 

Additionally, it's best to verify that it is set up correctly by going to the customer's profile or the Products/Services menu for the specific product or service. 

 

Kindly follow these steps:

 

For Products/Service profile:

 

  1. Go to the Sales menu, then choose the Product & Services tab.
  2. Under the Action column, click Edit.
  3. Scroll down and see the Sales tax section.
  4. You'll see Taxable or Non-taxable, according to what you've chosen as you set up the item.
  5. You can click X to exit.

 

For Customer's profile:

 

  1. Go to the Customer's & Leads, then double-click the customer's profile.
  2. Check within the customer's information if you correctly set up your customer as tax-exempt or not. This is according to your preference.
  3. Click X to exit.

 

After verifying that everything is set up correctly, it's best to check your transaction. By doing so, we can check if the Tax column is correctly ticked.

 

When it's verified that everything is set up correctly and transactions are properly ticked or unticked, it's best to contact our support so they can check why this is happening on your end. Kindly refer to this article: QuickBooks Online Support.

 

To learn more about sales tax, check this article: Sales tax in QuickBooks Online.

 

Furthermore, you can access this material to edit your sales tax rate: Edit sales tax rate in QuickBooks Online.

 

I'll be here to help you so please let me know if you have additional concerns regarding Sales Tax, Mdmx1324.

FishingForAnswers
FishingForAnswers
October 28, 2024

@IrizA  Would you like to try again, only this time, after reading the OP's question instead of their title?

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