sales tax code Archives

A sales tax code is a list item that is used to set the overall taxable or non-taxable status of both customers and items (goods or services).

You should use sales tax codes to identify a customer, such as a reseller, from which you don’t collect sales taxes, or to identify goods and services that aren’t taxable even to customers who are otherwise taxable.

Sales tax codes are maintained on the Lists->Sales Tax Codes menu. There is a secondary method to maintain sales tax codes by visiting the the Edit->Preferences menu and choosing the Company Preferences tab on the Sales Tax submenu.

Primary Method to Maintain Sales Tax Codes

QuickBooks Premier 2009 Sales Tax Code List

Secondary Method to Maintain Sales Tax Codes

QuickBooks Premier 2009 Preferences Sales Tax Codes

There are only 2 types of sales tax codes: taxable and non-taxable.

If a customer is marked with a non-taxable code, all invoices for that customer are non-taxable. If an item is marked as non-taxable, no sales taxes will be charged for that item even for a customer who otherwise pays sales taxes.

When you add or edit a customer, you can use a sales tax code to specify that customer’s overall taxable status. The sales tax code is on the Additional Info tab in the New and Edit Customer windows.

QuickBooks Premier 2009 New Customer Sales Tax Code

When an invoice is created in the Create Invoices window, the sales tax code can be entered for each line item on the invoice and for the overall invoice. These values default to the sales tax codes for the item and customer, but they can be changed for this invoice only. For example, this capability could be used to eliminate sales taxes on a single invoice for an out-of-state shipment to an otherwise taxable customer.

QuickBooks Premier 2009 Create Invoices Sales Tax Code

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The first step to collect and track sales tax in QuickBooks is to enable the preference to do so.

On the Edit->Preferences menu, select the Company Preferences tab on the Sales Tax submenu.

Click Yes on the Do you charge sales tax? preference.

QuickBooks Enterprise Solutions 10 Preferences Sales Tax

Once the preference is set, you use:

sales tax codes to specify whether a customer or item is or is not taxable
sales tax items to specify the sales tax applicable to a customer or invoice
sales tax groups to combine multiple sales tax items into a combined rate for a customer or invoice

To collect and track sales tax, you’ll need to create at least 1 sales tax item, which you can do directly from the Preferences window.

QuickBooks Premier 2009 Preferences Sales Tax Items

If you are changing your sales tax preference after you’ve already created customers, inventory, or non-inventory parts, you’ll be given the opportunity to change the tax status of those existing customers and items. When the Updating Sales Tax window appears, choose what you’d like to update and click Ok.

QuickBooks Premier 2009 Updating Sales Tax

This update process will update all customers and all items that are either an inventory part or non-inventory part, so make your decision to update carefully. Decide based on the characteristics for the bulk of your customers or inventory items, because the exceptions will have to be reviewed and changed individually.

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What Is a Sales Tax Code and How Should I Use One?

How Do I Collect and Track Sales Tax?

sales tax code

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