Sales Tax


Long-ish term user of Quicken, but new to Quicken Business.  I just can't figure out how Sales Tax is supposed to be handled.

I found this really helpful Quicken Forum post on the topic...

In it, @Tom Young does a really good job explaining the idea behind Sales Tax and how Quicken is designed to handle it.  He also explains how you might use Savings Goals in addition to the normal *Sales Tax* account.

Our Background:  We operate a brick and mortar location and sales tax is collected through our POS (point of sale) software.  That software automatically downloads the entire amount (item + sales tax) as one lump sum nightly.  At this time, I don't see us using the Customer Invoices and the $100 one in the screenshot is just me playing around.

Lets say the nightly deposit is $107 (item = $100, sales tax = $7).

My Question:  How do you get sales tax to show up there?  Preferably automatically!

Quicken user since 2014.
Using Quicken Windows Subscription on Windows 10.


  • Chris Harris
    Chris Harris Member ✭✭✭✭
    edited December 2019
    P.S. I renamed *Sales Tax* to *Bus. - Sales Tax" just to make it fall in line with my naming criteria. Forgot to mention that although I'm guessing it's obvious.

    Quicken user since 2014.
    Using Quicken Windows Subscription on Windows 10.
  • Greg_the_Geek
    Greg_the_Geek SuperUser ✭✭✭✭✭
    Is the Taxable box checked on your Invoice Item(s)?

    Is you Sales Tax Account on your Invoice form?

    Quicken Subscription HBRP - Windows 10
  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    I don't have the Business version of Quicken so I can't definitively comment on how to use its features here. 
    One way of doing this, I suppose, would be to use the "Invoicing" feature to create one invoice for each day's sales.  I guess the "Bill to" would be the customer "One day's sales", you'd invoice for $100 and, presumably, Quicken would calculate $7 of sales tax.  I'd guess the creation of the invoice would make an entry to an "Accounts Receivable" Account for $107, crediting the Sales Category for $100 and crediting the Sales Taxes liability Account for $7.  Then you'd "apply" the $107 deposited into the checking Account to that particular invoice.
    But I assume there's your POS system makes the distinction between sales and sale taxes and you can see this information each evening, so the other obvious way of doing this, (and I assume the Business product will allow it), is that when you shut the doors and the end of the day you look at the POS summary information and make a split entry into Quicken
    Debit (increase) Cash in Bank Account     $107
    Credit (increase) Sales Category               $100
    Credit (increase) Sales Tax Account          $   7
    and at some point the download from the bank "matches" your manual entry.
  • chitownhockey
    chitownhockey Member ✭✭✭✭
    If I'm clear, you're not creating invoices...but just want a way to record the daily sales and sales tax.  So I don't think there's any need to even use the invoice module, nor do I think you need to even use Quicken HBR in this instance (unless you are using other business features).  

    I'd make it a bit simpler, but different, than Tom's explanation above mine.  I'd just make a split entry in your business checking account for the entire day's POS summary as follows:

    POS Sales $100
    Transfer to a Sales Tax liability account $7

    Total amount shown $107.

    You HAVE collected $107...the amount of the sales AND the sales tax, but your portion is only the $100.  

    Your Sales Tax liability account will continue to increase daily with each POS summary.

    When you pay your Sales Tax due (presumably quarterly), you'd write a check (or EFT) for the amount due and categorize it as a transfer to the liability account, thus bringing down the balance of that account.

    And my business experience with taxes paid always accounts for payments through a specific date.  Whereas you might have a payment due on April 15, 2020, the taxes are for the first quarter which actually ends March 31, 2020.  So, it's easy to see the "ending balance" on March 31, 2020 as to what is owed to the state.  

    The reason I would use a liability account for the sales tax is that it's NOT your's money that's collected and accrued that's owed to the state.  You're just holding it for them.  
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