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Subject Author Date
Tax only a percentage of certain items? emtaylor 10-30-2007
Posted by emtaylor on October 30, 2007, 5:27 pm
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 Right now, we charge tax on some items and don't charge tax on others
- easy.

However, we just discovered a tax law in our state that basically says
that we can collect sales tax "on only 80 percent of the amount you
bill for your information service". (Which is already one of our
taxable items.)

So, we have to charge the full tax rate, but only on 80% of the
TAXABLE part of the bill.

Example:
Item 1 $100 (non taxable)
Item 2 $100 (taxable)
** We would charge sales tax on only $80. ** UGH!!!!!!!!

I assume there is no way to do this in QB, but I thought I would ask.

FYI, we have QB 2005, but would be willing to upgrade if the feature
is available in later versions!


Posted by Allan Martin on October 30, 2007, 5:44 pm
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> Right now, we charge tax on some items and don't charge tax on others
> - easy.
>
> However, we just discovered a tax law in our state that basically says
> that we can collect sales tax "on only 80 percent of the amount you
> bill for your information service". (Which is already one of our
> taxable items.)
>
> So, we have to charge the full tax rate, but only on 80% of the
> TAXABLE part of the bill.
>
> Example:
> Item 1 $100 (non taxable)
> Item 2 $100 (taxable)
> ** We would charge sales tax on only $80. ** UGH!!!!!!!!
>
> I assume there is no way to do this in QB, but I thought I would ask.
>
> FYI, we have QB 2005, but would be willing to upgrade if the feature
> is available in later versions!

Without much thought on my part, why not adjust the tax rate to 80% of the
normal rate?





>


Posted by emtaylor on October 30, 2007, 5:59 pm
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>
> Without much thought on my part, why not adjust the tax rate to 80% of the
> normal rate?
>
Current tax rate is 8.25.

Collecting full tax (8.25%) on $80 (as in example above) is $86.60.
(This is what we are trying to do.)

Collecting 80% of the tax rate (which would make it 6.1875%) on full
amount (100.00) comes out to $106.19.

Big difference! :)

>
>


Posted by vcardx on October 30, 2007, 8:05 pm
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No, what I think you are really trying to do is come up with TAX amount of
$6.60 on your sales of $100 (since that is the only part payable to the
state - the $86.60 amount is meaningless). The amount payable by customer
is $106.60, isn't it??
Use 6.6% rate on the full taxable amount, and that will calculate the proper
amount of sales tax payable. (And that is 80% of 8.25% anyway. The 6.1875%
you quoted is only 75%...)

vcardx

: >
: > Without much thought on my part, why not adjust the tax rate to 80% of
the
: > normal rate?
: >
: Current tax rate is 8.25.
:
: Collecting full tax (8.25%) on $80 (as in example above) is $86.60.
: (This is what we are trying to do.)
:
: Collecting 80% of the tax rate (which would make it 6.1875%) on full
: amount (100.00) comes out to $106.19.
:
: Big difference! :)
:
: >
: >
:



--
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Posted by emtaylor on October 31, 2007, 11:01 am
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> No, what I think you are really trying to do is come up with TAX amount of
> $6.60 on your sales of $100 (since that is the only part payable to the
> state - the $86.60 amount is meaningless). The amount payable by customer
> is $106.60, isn't it??
> Use 6.6% rate on the full taxable amount, and that will calculate the proper
> amount of sales tax payable. (And that is 80% of 8.25% anyway. The 6.1875%
> you quoted is only 75%...)
>
You're right, but what if I need to collect full sales tax on other
items that are not classified as 'information services' - then I'm
kind of screwed, right?


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