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We have been seeing an increase in the amount of questions concerning Sales Tax recently. It would appear that when QuickBooks Point of Sale sends it’s data to the QuickBooks software, some issue have been catching people’s attention.
Lets look at some common causes.
When the sales tax report does not match the Point of Sale Tax Journal, one common issue is that the QuickBooks has been set to Owe sales tax at the time of payment. This is called Cash Basis, and the issue can appear when you allow customers to Charge on Account. Charging on Account is a Accrual Basis activity. Normally in this case, you would owe the sales tax at the time the Invoice, or Charge is made. So because of the settings in QuickBooks, you can see a difference because the POS program is indicating that the Sales tax has been collected, but QuickBooks thinks it is not owed.
To change the preference in QuickBooks, based on your accountants feedback:
- In QuickBooks, choose Edit > Preferences.
- Select Sale Tax in the window on the left side.
- Click the Company Preferences tab and select As of invoice date under the Owe Sales Tax heading.
- Click OK and run the Sales Tax Liability report.
You may also see a situation where the Total Sales and the Taxable Sales are showing the same info on multiple sales tax items. Why is this happening?
When Point of Sale summarizes sales data and sends it to QuickBooks, multiple sales taxes may show on one receipt. This causes the QuickBooks Sales Tax Liability report to show the taxable sales as a total of all sales that are taxed on the summarized receipt.
To view the desired tax information, there are two options available:
- Send information to QuickBooks using detailed item description.
- When sending information to QuickBooks using summarized item totals, assign different QB tax codes to the various POS Tax Codes.
Another situation we see commonly is that QuickBooks is causing additional tax to be added.
The cause for this is often a misconception of how the programs talk. Point of Sales will add sales tax to the sale. In order for it to send the data to QuickBooks, and not have additional sales tax charged, it creates a Sales Tax item which can be seen as POS STX, or POS Sales Tax, depending on your version. This item has a rate of 0.0%. It is a placeholder of sorts, and although it may look odd, the tax rate of 0.0% is correct for this function.
The issue typically arises in that someone with the best of intentions, changes the rate of the item to match their sales tax rate for their store. This actually causes the QuickBooks to add sales tax again.
Our hope is that this helps to clear up some of the issues that have been seen recently, and helps you keep your sanity a bit.
Also, if you are seeing issues with the Sales Tax reports in the QuickBooks. You can always run a Z-out store close report, reset the date for the entire month (and filter to an individual store if you wish). This will show you your sales, and the tax collected for that time period.
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