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

Manuel

"Manuel Davila" <davilanet@comcast.net> wrote in message
news:1POdnUGbjIqh8LfYnZ2dnUVZ_qqdnZ2d@comcast.com. ..

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.

Going the customer route would work, but he would be paying sales/use
tax on the retail value of the parts, not the costs? I am still
learning QB so I could be missing something.
TK

Laura wrote:

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



"Laura" <invalid@sample.invalid> wrote in message
news:VSuWg.231410$QM6.104544@bgtnsc05-news.ops.worldnet.att.net...

It is my understanding that the Use Tax is based on the cost to the company,
not the retail value. I pay this every Quarter. First create an account
called, "Sales Tax Expense". Then click on Pay Sales Tax, Click on Adjust,
Click on Adjustment Account and enter the amount charging it to the Sales
Tax Expense account. Taking things from inventory for business use is a
separate issue from the tax thereon and can simply be charged to your office
equipment repair account. I created two accounts for this so I always know
which items were previously taxed and which ones weren't. When tax time
rolls around, look at the account showing total items removed from inventory
that weren't previously taxed so you can figure what you owe.

Bob


"TKnTexas" <tkntexas55@aol.com> wrote in message
news:1160415008.281400.73390@m7g2000cwm.googlegrou ps.com...

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"
<davilanet@comcast.net> wrote:



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

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



"Steve Scott" <sscott1@twcny.rr.com> wrote in message
news:mo6li2plfic9hhelg7669sptgd2slg8aop@4ax.com...

I would just charge the company the cost of the parts used in the computer.

"TKnTexas" <tkntexas55@aol.com> wrote in message
news:1160415008.281400.73390@m7g2000cwm.googlegrou ps.com...

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.

"Manuel Davila" <davilanet@comcast.net> wrote in message
news:9-qdnROhLM2XB7fYnZ2dnUVZ_qSdnZ2d@comcast.com...

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



"Laura" <invalid@sample.invalid> wrote in message
news:CfAWg.45045$QZ1.28170@bgtnsc04-news.ops.worldnet.att.net...