Managing Sales Tax

In the United States, sales tax is typically applied to the sale of products. However, some states and local tax jurisdictions also apply sales tax to certain types of services. The way sales tax works is that the tax is paid by customers who purchase your products. The business that collects the sales tax from its consumer is responsible for reporting the sales tax collected on a sales tax return and submitting it to the appropriate state and/or local tax authority. The tax is typically due on a monthly, quarterly, or annual basis, depending on the amount collected. If you fail to file and/or pay sales tax, you will incur penalties and interest until the tax is paid. It’s, therefore, important to consult with your CPA or tax professional to determine which laws apply in your geographical location as well as how often you need to file and when payment is due.

In this chapter, we will cover how to manage sales tax in QuickBooks Online (QBO). While you...