Sales Tax Line Item Journal Entry

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Introduction

In many U.S. states, the tax rate depends on your roof top location. Since many e-commerce solutions tax by postal (zip) code and QuickBooks can only tax by county, many of our users add tax as a line item. This article guides you through calculating Sales Tax Payable.

Sales Tax Line Item

Our system creates a line item called sales tax. Go to your QuickBooks Item and Services list. Change the Income Account to a new account called Sales Tax Income. All funds received for sales tax will be in this account.

Journal Entry

We recommend creating a journal entry to credit your Sales Tax Payable and debit the Sales Tax Income account. 

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