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Sales tax codes and how to report

We have services that we perform that are not taxable in our state. We also sell products that are taxable. However, we have some customers that are not taxed because they resell the product, they're exempt by statue (hospitals, for example) or they live outside our state. This all has to be detailed on our sales tax report.

We attempted to track it by using a tax code to track out of state, resale, etc. and a tax item of Sales Tax or Non-taxable. For instance, the local hospital has a tax code STA for "non-taxable per statute" and a tax item of "non taxable."

To our dismay, after a month's invoicing the sales tax report is by item only. What the sales tax code does for us I haven't a clue.

The help file says "If your tax agency requires you to report the reasons why particular sales are taxable or non-taxable (and many do), the sales tax codes that you assign to your items and customers allow you to run reports that provide this information for your sales tax return." OK. That's good, but where's that report. Can someone enlighten me?

Reply to
Frank
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I can't answer your question but a possible solution is to use classes for tracking tax reporting info. Its what I do.

Reply to
Tee

Oops. You read the QB documentation. It sucks on sales tax.

Everything is a taxable transaction. Let me repeat that: EVERYTHING IS A TAXABLE TRANSACTION. You only use the "TAX" sales tax code.

Use the sales tax items to tell you which tax is to be applied. For instance use a tax item resale. That way the resale is all grouped together and taxed at

0%. Another tax item you might need is out of state. Another you might need is non taxable labor.
Reply to
Golden California Girls

Thanks, that's sort of what I wound up doing with slight modifications. One irritant is that the sales tax code for the customer overrides the sales tax code for the item. For instance, some of our services are not taxable to anyone, so the code is "Non" on the items. But a customer who buys taxable items wholesale will have Resale code. When they have the service performed, that service code is overwritten with Resale. This blows my sales tax report.

My wife actually runs the business on a daily business, and I'm having a hard time making her understand why she needs to watch how they are coded. If it doesn't charge sales tax, she doesn't care if it's coded for RESale or NONtaxable.

Reply to
Frank

Can't say about your state, but mine doesn't care if I sell a service that isn't taxable as resale. When they aduit they look for the resale certificate not at each item on the invoice. Well they do look for some items which are taxed even to resale customers, the use part of the tax.

Also I don't think you got the point. Only two tax codes: "TAX" and "NON" and the "NON" is only because QB won't let you delete it. No code of RESale! Use the tax item resale!

Reply to
Golden California Girls

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