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Subject Author Date
How to pay State Tax for use of material Manuel Davila 10-09-2006
Posted by Manuel Davila on October 9, 2006, 2:50 pm
Please log in for more thread options
 Laura,

Thank you so much for the answer. All my items are Non-Inventory, so no
problem having to update the stock. Pursuing the new customer avenue and of
course entering the invoice items at cost there is no problem. But, to pay
the Invoice will require that the company must be set as a Vendor as well,
correct? Do I have to write a check? Can the bill (invoice) be paid
otherwise without having to use the bank register?



How about if I create an item called discount (or Company Use) then posting
it in the invoice discounting 100% the Total value of the invoice? I tried
that and indeed the tax appeared in the Sales Tax Liability report!



Example:

Original Invoice was:

Material 100.00

Tax 10.00

Total 110.00



Invoice with total amount discounted:

Material: 100.00

Disc: -110.00 (new line)

Tax 10.00 (was still kept in the invoice!)

Total 0.00 (total is now 0)



Is this orthodox or it will cause other problems?



TIA

Manuel



>> Hello Group,
>> How to pay the State Sales & Use Tax for material that was purchased with
>> resale tax-exempt status.
>>
>> Here is the situation: I run a small computer business. I built a
>> Computer for the company using tax exempt parts.
>>
>> Now I have to pay the "Sales and Use Sales Tax" (GA requirement). How can
>> I do that in QB?
>>
>> Should I add my company as a new customer and create an Invoice, and
>> then.?
>>
>> Thanks in advance
>
> That's certainly one way to do it. Treat your company as a customer via an
> invoice. Then just pay that invoice and just deposit that check back into
> the company.
>
> You could also do a journal entry to debit purchases and credit sales tax
> payable. Then just cut a check to the state for the accumulated sales tax
> due. If this is a one time event then you could just use Write Checks to
> the state posting it to the purchase account.
>
> If these parts are posted to inventory then I would probably go with the
> customer route so that the inventory is adjusted properly. With method 2
> you would need to do an inventory adjustment to remove those parts used.
>



Posted by Steve Scott on October 9, 2006, 3:06 pm
Please log in for more thread options
 If all you're looking to do is pay the ST for material you used within
the company, simply go to "Pay Sales Tax". Click "Adjust". Click
"Increase Sales Tax by..." and in the memo area put "Use Tax". This
assumes you have QBPro 2006. I imagine there's something similar for
other versions. I wouldn't do the invoice route.

I have a somewhat similar situation in that we pay sales tax on
everything we buy. We can claim a credit for sales tax on items we
purchase that were used on jobs that we charge sales tax on. So we
generally end up paying less ST than QB says we owe. I go through the
process I outlined above. I credit the account that originally paid
the ST.

On Mon, 9 Oct 2006 14:50:48 -0400, "Manuel Davila"

>Laura,
>
>Thank you so much for the answer. All my items are Non-Inventory, so no
>problem having to update the stock. Pursuing the new customer avenue and of
>course entering the invoice items at cost there is no problem. But, to pay
>the Invoice will require that the company must be set as a Vendor as well,
>correct? Do I have to write a check? Can the bill (invoice) be paid
>otherwise without having to use the bank register?
>
>
>
>How about if I create an item called discount (or Company Use) then posting
>it in the invoice discounting 100% the Total value of the invoice? I tried
>that and indeed the tax appeared in the Sales Tax Liability report!
>
>
>
>Example:
>
>Original Invoice was:
>
>Material 100.00
>
>Tax 10.00
>
>Total 110.00
>
>
>
>Invoice with total amount discounted:
>
>Material: 100.00
>
>Disc: -110.00 (new line)
>
>Tax 10.00 (was still kept in the invoice!)
>
>Total 0.00 (total is now 0)
>
>
>
>Is this orthodox or it will cause other problems?
>
>
>
>TIA
>
>Manuel
>
>
>
>>> Hello Group,
>>> How to pay the State Sales & Use Tax for material that was purchased with
>>> resale tax-exempt status.
>>>
>>> Here is the situation: I run a small computer business. I built a
>>> Computer for the company using tax exempt parts.
>>>
>>> Now I have to pay the "Sales and Use Sales Tax" (GA requirement). How can
>>> I do that in QB?
>>>
>>> Should I add my company as a new customer and create an Invoice, and
>>> then.?
>>>
>>> Thanks in advance
>>
>> That's certainly one way to do it. Treat your company as a customer via an
>> invoice. Then just pay that invoice and just deposit that check back into
>> the company.
>>
>> You could also do a journal entry to debit purchases and credit sales tax
>> payable. Then just cut a check to the state for the accumulated sales tax
>> due. If this is a one time event then you could just use Write Checks to
>> the state posting it to the purchase account.
>>
>> If these parts are posted to inventory then I would probably go with the
>> customer route so that the inventory is adjusted properly. With method 2
>> you would need to do an inventory adjustment to remove those parts used.
>>
>


--
We have met the enemy and they are us
and you are me and we are all together
--Walt Kelly and the Beatles





Posted by Manuel Davila on October 9, 2006, 4:07 pm
Please log in for more thread options
Steve,

Thanks for the input. We do have QB 2006. I think I still like the Invoice
solution because in addition to pay the ST it also keeps trace of the use of
our material.

We also have the same situation you described concerning products we sell
that we previously paid ST.

Now I know what to do, thanks for the tip.

Manuel



> If all you're looking to do is pay the ST for material you used within
> the company, simply go to "Pay Sales Tax". Click "Adjust". Click
> "Increase Sales Tax by..." and in the memo area put "Use Tax". This
> assumes you have QBPro 2006. I imagine there's something similar for
> other versions. I wouldn't do the invoice route.
>
> I have a somewhat similar situation in that we pay sales tax on
> everything we buy. We can claim a credit for sales tax on items we
> purchase that were used on jobs that we charge sales tax on. So we
> generally end up paying less ST than QB says we owe. I go through the
> process I outlined above. I credit the account that originally paid
> the ST.
>
> On Mon, 9 Oct 2006 14:50:48 -0400, "Manuel Davila"
>
>>Laura,
>>
>>Thank you so much for the answer. All my items are Non-Inventory, so no
>>problem having to update the stock. Pursuing the new customer avenue and
>>of
>>course entering the invoice items at cost there is no problem. But, to pay
>>the Invoice will require that the company must be set as a Vendor as well,
>>correct? Do I have to write a check? Can the bill (invoice) be paid
>>otherwise without having to use the bank register?
>>
>>
>>
>>How about if I create an item called discount (or Company Use) then
>>posting
>>it in the invoice discounting 100% the Total value of the invoice? I
>>tried
>>that and indeed the tax appeared in the Sales Tax Liability report!
>>
>>
>>
>>Example:
>>
>>Original Invoice was:
>>
>>Material 100.00
>>
>>Tax 10.00
>>
>>Total 110.00
>>
>>
>>
>>Invoice with total amount discounted:
>>
>>Material: 100.00
>>
>>Disc: -110.00 (new line)
>>
>>Tax 10.00 (was still kept in the invoice!)
>>
>>Total 0.00 (total is now 0)
>>
>>
>>
>>Is this orthodox or it will cause other problems?
>>
>>
>>
>>TIA
>>
>>Manuel
>>
>>
>>
>>>> Hello Group,
>>>> How to pay the State Sales & Use Tax for material that was purchased
>>>> with
>>>> resale tax-exempt status.
>>>>
>>>> Here is the situation: I run a small computer business. I built a
>>>> Computer for the company using tax exempt parts.
>>>>
>>>> Now I have to pay the "Sales and Use Sales Tax" (GA requirement). How
>>>> can
>>>> I do that in QB?
>>>>
>>>> Should I add my company as a new customer and create an Invoice, and
>>>> then.?
>>>>
>>>> Thanks in advance
>>>
>>> That's certainly one way to do it. Treat your company as a customer via
>>> an
>>> invoice. Then just pay that invoice and just deposit that check back
>>> into
>>> the company.
>>>
>>> You could also do a journal entry to debit purchases and credit sales
>>> tax
>>> payable. Then just cut a check to the state for the accumulated sales
>>> tax
>>> due. If this is a one time event then you could just use Write Checks to
>>> the state posting it to the purchase account.
>>>
>>> If these parts are posted to inventory then I would probably go with the
>>> customer route so that the inventory is adjusted properly. With method 2
>>> you would need to do an inventory adjustment to remove those parts used.
>>>
>>
>
>
> --
> We have met the enemy and they are us
> and you are me and we are all together
> --Walt Kelly and the Beatles
>
>
>
>



Posted by Laura on October 9, 2006, 6:42 pm
Please log in for more thread options
I tested out the Discount routine and it looks like it works perfectly. I
did have to redit the item and change it to be non-taxable for it to work
right. I can't see any issues with it especially since you probably should
not be showing this as income to the company in the first place. Using this
discount method eliminates this problem.

I do have one correction to your example. My testing came out to the
following:

Original Invoice was:

Material 100.00
Tax 10.00
Total 110.00

Invoice with total amount discounted:

Material: 100.00
Disc: -100.00 (non taxable)
Tax 10.00 (was still kept in the invoice!)
Total 10.00 (sales tax only)

This leaves the sales tax liability that you are looking for plus removes
the sale of the materials that you should not be showing on the books.

> Laura,
>
> Thank you so much for the answer. All my items are Non-Inventory, so no
> problem having to update the stock. Pursuing the new customer avenue and
> of course entering the invoice items at cost there is no problem. But, to
> pay the Invoice will require that the company must be set as a Vendor as
> well, correct? Do I have to write a check? Can the bill (invoice) be paid
> otherwise without having to use the bank register?
>
>
>
> How about if I create an item called discount (or Company Use) then
> posting it in the invoice discounting 100% the Total value of the invoice?
> I tried that and indeed the tax appeared in the Sales Tax Liability
> report!
>
>
>
> Example:
>
> Original Invoice was:
>
> Material 100.00
>
> Tax 10.00
>
> Total 110.00
>
>
>
> Invoice with total amount discounted:
>
> Material: 100.00
>
> Disc: -110.00 (new line)
>
> Tax 10.00 (was still kept in the invoice!)
>
> Total 0.00 (total is now 0)
>
>
>
> Is this orthodox or it will cause other problems?
>
>
>
> TIA
>
> Manuel
>
>
>
>>> Hello Group,
>>> How to pay the State Sales & Use Tax for material that was purchased
>>> with resale tax-exempt status.
>>>
>>> Here is the situation: I run a small computer business. I built a
>>> Computer for the company using tax exempt parts.
>>>
>>> Now I have to pay the "Sales and Use Sales Tax" (GA requirement). How
>>> can I do that in QB?
>>>
>>> Should I add my company as a new customer and create an Invoice, and
>>> then.?
>>>
>>> Thanks in advance
>>
>> That's certainly one way to do it. Treat your company as a customer via
>> an invoice. Then just pay that invoice and just deposit that check back
>> into the company.
>>
>> You could also do a journal entry to debit purchases and credit sales tax
>> payable. Then just cut a check to the state for the accumulated sales tax
>> due. If this is a one time event then you could just use Write Checks to
>> the state posting it to the purchase account.
>>
>> If these parts are posted to inventory then I would probably go with the
>> customer route so that the inventory is adjusted properly. With method 2
>> you would need to do an inventory adjustment to remove those parts used.
>>
>
>


Posted by Manuel Davila on October 9, 2006, 9:10 pm
Please log in for more thread options
Laura,

Thank you for taking the time to test the routine. If you discount the full
total of the invoice (as non-taxable) then the invoice will show as paid in
full, hence no need to create a bill to pay it.

Material: 100.00
Disc: -110.00 (non taxable)
Tax 10.00 (was still kept in the invoice!)
Total 0.00 (invoice paid in full, no need to create a bill)



This is the exact result desired:

1.. No need to create a second redundant transaction to paid the bill
2.. The ST will still show in the Tax Liability
3.. Transaction can be tracked
Thanks again,
Manuel



>I tested out the Discount routine and it looks like it works perfectly. I
>did have to redit the item and change it to be non-taxable for it to work
>right. I can't see any issues with it especially since you probably should
>not be showing this as income to the company in the first place. Using this
>discount method eliminates this problem.
>
> I do have one correction to your example. My testing came out to the
> following:
>
> Original Invoice was:
>
> Material 100.00
> Tax 10.00
> Total 110.00
>
> Invoice with total amount discounted:
>
> Material: 100.00
> Disc: -100.00 (non taxable)
> Tax 10.00 (was still kept in the invoice!)
> Total 10.00 (sales tax only)
>
> This leaves the sales tax liability that you are looking for plus removes
> the sale of the materials that you should not be showing on the books.
>
>> Laura,
>>
>> Thank you so much for the answer. All my items are Non-Inventory, so no
>> problem having to update the stock. Pursuing the new customer avenue and
>> of course entering the invoice items at cost there is no problem. But, to
>> pay the Invoice will require that the company must be set as a Vendor as
>> well, correct? Do I have to write a check? Can the bill (invoice) be paid
>> otherwise without having to use the bank register?
>>
>>
>>
>> How about if I create an item called discount (or Company Use) then
>> posting it in the invoice discounting 100% the Total value of the
>> invoice? I tried that and indeed the tax appeared in the Sales Tax
>> Liability report!
>>
>>
>>
>> Example:
>>
>> Original Invoice was:
>>
>> Material 100.00
>>
>> Tax 10.00
>>
>> Total 110.00
>>
>>
>>
>> Invoice with total amount discounted:
>>
>> Material: 100.00
>>
>> Disc: -110.00 (new line)
>>
>> Tax 10.00 (was still kept in the invoice!)
>>
>> Total 0.00 (total is now 0)
>>
>>
>>
>> Is this orthodox or it will cause other problems?
>>
>>
>>
>> TIA
>>
>> Manuel
>>
>>
>>
>>>> Hello Group,
>>>> How to pay the State Sales & Use Tax for material that was purchased
>>>> with resale tax-exempt status.
>>>>
>>>> Here is the situation: I run a small computer business. I built a
>>>> Computer for the company using tax exempt parts.
>>>>
>>>> Now I have to pay the "Sales and Use Sales Tax" (GA requirement). How
>>>> can I do that in QB?
>>>>
>>>> Should I add my company as a new customer and create an Invoice, and
>>>> then.?
>>>>
>>>> Thanks in advance
>>>
>>> That's certainly one way to do it. Treat your company as a customer via
>>> an invoice. Then just pay that invoice and just deposit that check back
>>> into the company.
>>>
>>> You could also do a journal entry to debit purchases and credit sales
>>> tax payable. Then just cut a check to the state for the accumulated
>>> sales tax due. If this is a one time event then you could just use Write
>>> Checks to the state posting it to the purchase account.
>>>
>>> If these parts are posted to inventory then I would probably go with the
>>> customer route so that the inventory is adjusted properly. With method 2
>>> you would need to do an inventory adjustment to remove those parts used.
>>>
>>
>>
>



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