Tracking use tax

I suppose you could enter the use tax on the check or bill when you first enter it which debits Use Tax Expense and Credits Use Tax Payable for the amount due. You could expand on that practice if State/County/City taxes are involved my using sub-accounts for each on the Use Tax Payable credits. This will not change the check or bill amount because the debits and credits will equal zero and will give to a list of the use tax by check or by vendor bill at year-end.

What I do at the end of the year is go through the A-Z paid bills and create an Excel worksheet then.

Can't wait to hear other ideas on this topic. Neither of my solutions is very practical.

Jo the above is quite practical. Because the user can identify the exact type of expenditure that applies to the use tax, charging that expense or asset with the amount of the tax would be a better choice than "use tax expense".

You could expand on that practice if State/County/City taxes

I agree. One would include it in the expense account of the item if it were on the invoice.

I have same situation as Kevin, except I have QB Pro 2005. I hoped to find a transfer receipt or some such that would track the use tax the way a sales receipt does the sales tax. I guess that isn't there.

I am not sure I understand the procedure described above- Do you mean I should go back and edit the original bill to included use tax when I remove an item from inventory?

That does seem impractical to me.

And it may not record in the correct year either. What entry are you making to expense something from Inventory? Put the Use Tax information on that transaction.

None, yet. I was waiting until I found the right form. I guess you are saying I bill from the company to the company, adding the use tax as an expense, or maybe create an item for the use tax expense?

-- Phil Nelson

As Allan Martin pointed out, the Use Tax Expense should rightfully be charged to the same account as the purchase or withdrawal from inventory when used. But the most important part of the entry is the Liability Account called "Use Tax Payable" which is where your periodic report will come from when you need the information for your Sales/Use Tax Return.