Usage tax is applied to purchases done to you from other state than the one where your business is located. Usually, the tax gets applied to state having a sales tax only. Its main objective to make tax burden similar while purchasing from in or out of state vendors. In this article, we will be helping you with the process to track usage tax in QuickBooks Desktop manually.
This article is a part of series on Sales Tax. In this series, we have covered all the usual workflows in QuickBooks Desktop.
It also helps you complete other sales tax-related tasks.
- Handle cash basis sales tax
- Process sales tax adjustment
- Show multiple sales tax items on an invoice
- Refund sales tax collected from tax exempt customers
- Track sales tax on purchases from vendors
If you face any issue regarding sales tax in QuickBooks Desktop, you can refer to Resolve common sales tax issues.
- Set up Out-of-State vendors.
- From the Lists menu, select Customer & Vendor Profile Lists.
- Click on Vendor Types List.
- Type Outstate under the Vendor Type section and select OK.
- Go to the Vendors menu and option Vendor Center.
- Locate the out-of-state vendor and right-click on same.
- Select Edit Vendor from the drop-down options.
- From the Vendor Type drop-down options, go to Additional Info
- Click on Outstate option and then select OK.
NOTE: You need to perform same steps for each out-of-state vendor available in Vendor Center.
- Open Transaction Detail Report for all Use Tax time period.
- From the main menu, go to Reports and then choose Accountant & Taxes.
- Choose Transaction Detail By Account
- Select the Customize Report.
- Navigate to the Filters tab and from Filters list, choose Account.
- Click on Account drop-down and select Multiple Accounts.
- Choose correct payment accounts and then select OK.
- From the Filters list, choose Vendor Type.
- Select Outstate from the Vendor Type drop-down and select OK.
- Use tax percentage to multiply the report balance. This will help you in identifying the sum of use taxed owed to the tax vendor.
IMPORTANT: If you have to pay Use Tax sale and Sales Tax on same check, you need to provide the User Tax details under Sales Tax Payable section. Make sure that the appropriate tax vendor, amount, and expense amount is used in it. Once you are ready to pay your taxes, you need to go to the home screen of QuickBooks and select Manage Sales Tax > Pay Sales Tax.
The provided solutions should be helpful for you and you should have complete knowledge about how to track usage tax in QuickBooks Desktop. However, if you are still in confusion or you are facing any issue with your sales tax, you can connect with our QuickBooks ProAdvisors by dialing our toll-free QuickBooks Support Phone Number +1855-565-6250 and get instant solution for QuickBooks.