Thanks for your comments and question. Sales tax can get real tricky, especially in a situation where you are dealing with multiple rates. Generally, a simple setup in a retail situation is to use the Sales Receipt form to capture your daily sales, and you would set up your items to separate the types of sales. For example, you would have an item for food sales and make that taxable for the sales tax rate that applies to food items, and then if you have retail products you sell as well, that would be included with a different item, coded as taxable at that appropriate sales rate. Much of how you design your sales capture system for your business depends on how much detail you need to track for your management and reporting purposes. It can get complicated very quickly. If that happens, you may want to consider looking into QuickBooks Point of Sale (not cheap) to integrate with your cash register for cleaner reporting.

Glad the video was helpful. Regarding your questions….

1. Yes, you are correct, QB is expecting % to calculate taxes (Ug, Simple Start – upgrade to Pro as soon as you can. There are so many limitations in Simple Start). You cannot manually adjust sales tax on invoices, but when paying the sales tax, you can make an adjustment. If you must adjust at the invoice level, you may need to create a special item to make the bottom line come out right, and then use the account that item is tied to to make it balance when making the sales tax adjustment.
2. I am not aware of a “bug” on invoices regarding taxable and non-taxable items. Remember, you mark the customer coded as exempt (if they are) AND each item. The bottom of the invoice is based on the customer default, whereas the line items are based on the items chosen. But you should be able to adjust on each invoice as well. Again, I’ve not seen this problem, but if you spot it you can make the adjustment in the Manage Sales Tax area.
3. By now, you probably realize the answer to #3 is yes. And yes, you will tie the adjustment to the appropriate expense/income account.

As you can see, sales tax can get quite complicated, depending on your state laws.

I have watched your instructional video about “How to Prepare Form 1099-MISC in QuickBooks”. That is an EXCELLENT tool!! I learned a lot and now know how to properly set up vendors AND generate 1099 reports. I am excited!! It is so simple…once one knows the QB “secrets”. I am so pleased to have you as a resource!

Thank you! I have passed the information along to my client

A business that buys products or supplies that are going to be sold to their customers has a tax exempt certificate so that sales tax is not collected twice on the same product. Only the end user should be charged sales tax. That’s why the business would be exempt from sales tax when buying from suppliers (for re-sale).

However, when buying supplies that will be consumed by the business, which would be considered part of overhead and means that the business is the end user, the business is not exempt from sales tax.

For bookkeeping purposes, the sales tax paid in this latter scenario is considered part of the expense for what is purchased. For example, if you bought office supplies at Office Depot for use in the business, the entire purchase would be coded to your office expense account without breaking out the sales tax paid.

Hope that helps clarify how this works!

Thank you for sharing all your insight with us. I had a question about sales tax paid. I know tha that when dealing with vendors you can supply them with a tax exempt certificate so as to not be charged sales tax. However, my questions deals with purchases made at local stores such as Office Depot, The Home Depot, etc. where sales tax is charged. Thank you.