Where Amz is collecting and automatically paying the sales tax, you do not need to do this. See the lesson on 1099-K – Module 6 Unit 2 for more information.
For the states where Amz is collecting and remitting the sales tax to the seller, you will need to setup a sales tax item for each state or taxing authority.
If I am signed up to collect taxes in Kentucky I would just set up Kentucky state tax? I do not pay any county. Also do we just keep the taxable item code as “Tax” and “Non”?
If you are setup to collect only Kentucky state sales tax, only set up that. Leave your item tax codes as “non” so that all the other sales will be untaxed. Otherwise you will need to change it on EVERY sale. Then the particular sales that are taxed will be the only ones you will need to change to tax.
I try to show a couple ways to do everything in QB because the versions can change a bit over time. Looks like I missed that one. Glad you guys are adventurous and seek out the answers. QB Help is a good way to learn other ways of doing things. Thanks for sharing.
So I could not find the Sales Tax dropdown as others have stated in QuickBooks Pro 2019 and found out through QB help how to turn that option on by going to Edit>Preferences>Sales Tax>Company Preferences, just an FYI.
Thanks for pointing that out! I have QB Pro 2020 and found it but don’t I need to set up the tax rate in this section? QB is not letting me just turn it on and go back. So while I’m entering in the sales tax for my city/state, it wants me to enter in the Vendor’s name, which is Kansas City, MO. This is really confusing now. Hopefully, you will go into more detail soon. I know what I entered in seller central for collecting tax – that was the easy part, but this…
For QB PRO 2020 Mac Desktop users: click QUICKBOOKS by the apple icon to get to Preferences. From there, you’ll find a calculator icon for Sales Tax. The “Most common sales tax” dropdown menu is where the option to add different sales taxes is located.
If you add a tax agency that hasn’t been previously added, a pop-up window will let you know the vendor is not found/on the vendor list. Options given are set up, cancel, or quick add. To keep moving through the course, I chose quick add.
Sales tax is the most confusing part of AMZ selling for me! I live in Anchorage, Alaska. We do not have a state or county sales tax, although there are other counties in AK that do have sales tax. I don’t know if this has any bearing on my AMZ business or not. I just ran the sales tax calculation report as shown in your video and it was blank (just started this biz a couple of months ago). When I run the marketplace tax collection report, there are a bunch of sales there, but I apparently don’t have to remit taxes for those?
Are the reports you are running in QB showing taxes due only for your sales in the state of FL? I’m assuming that you have had sales in other states. How do you handle those sales tax reports and payments? Should I just tell QB that I do not charge sales tax at this point, or will this all make more sense as I get further into the course?
Hi Rachel, You are not alone when it comes to confusion about sales tax. Since I am neither a CPA nor Tax Accountant, I can’t advise you on what you should or shouldn’t be collecting and remitting. However, I can tell you how to post sales tax collected in QB. The course shows how to setup the Sales Tax Items for the tax authorities you are registered with and liable for collecting. If you do not collect sales tax and remit it, you would not setup any sales tax items. If you are seeing only Marketplace Facilitator Tax collected on your reports, that means Amazon is only collecting for those states and/or you had no sales in States for which you collect sales tax. With so many states following the Marketplace Facilitators Tax model, I think we will eventually come to a point where we are not responsible for any of the sales tax for sales on Marketplace platforms. So, that throws a wrench in the registering with states for collection. There are CPAs who say, no need to sign-up and others that say Nexus, nexus, nexus. I would advise you to contact your CPA and get their advice. As far as QB, if you are not collecting, you have nothing to put into QB. 🙂
Question on this – if Amazon is collecting and automatically paying the sales tax for us, do we need to do this step?
Also, for those states where Amazon is collecting and giving to us the sales tax, do we need to do this?
thanks
Where Amz is collecting and automatically paying the sales tax, you do not need to do this. See the lesson on 1099-K – Module 6 Unit 2 for more information.
For the states where Amz is collecting and remitting the sales tax to the seller, you will need to setup a sales tax item for each state or taxing authority.
If I am signed up to collect taxes in Kentucky I would just set up Kentucky state tax? I do not pay any county. Also do we just keep the taxable item code as “Tax” and “Non”?
If you are setup to collect only Kentucky state sales tax, only set up that. Leave your item tax codes as “non” so that all the other sales will be untaxed. Otherwise you will need to change it on EVERY sale. Then the particular sales that are taxed will be the only ones you will need to change to tax.
I am using Quickbooks Pro 2020 and I don’t see the Vendors>Sales Tax dropdown. Do you know where else I might find it?
Did you look under Lists>Item List? You are trying to setup sales tax items, right?
I try to show a couple ways to do everything in QB because the versions can change a bit over time. Looks like I missed that one. Glad you guys are adventurous and seek out the answers. QB Help is a good way to learn other ways of doing things. Thanks for sharing.
So I could not find the Sales Tax dropdown as others have stated in QuickBooks Pro 2019 and found out through QB help how to turn that option on by going to Edit>Preferences>Sales Tax>Company Preferences, just an FYI.
Thanks for pointing that out! I have QB Pro 2020 and found it but don’t I need to set up the tax rate in this section? QB is not letting me just turn it on and go back. So while I’m entering in the sales tax for my city/state, it wants me to enter in the Vendor’s name, which is Kansas City, MO. This is really confusing now. Hopefully, you will go into more detail soon. I know what I entered in seller central for collecting tax – that was the easy part, but this…
For QB PRO 2020 Mac Desktop users: click QUICKBOOKS by the apple icon to get to Preferences. From there, you’ll find a calculator icon for Sales Tax. The “Most common sales tax” dropdown menu is where the option to add different sales taxes is located.
If you add a tax agency that hasn’t been previously added, a pop-up window will let you know the vendor is not found/on the vendor list. Options given are set up, cancel, or quick add. To keep moving through the course, I chose quick add.
Sales tax is the most confusing part of AMZ selling for me! I live in Anchorage, Alaska. We do not have a state or county sales tax, although there are other counties in AK that do have sales tax. I don’t know if this has any bearing on my AMZ business or not. I just ran the sales tax calculation report as shown in your video and it was blank (just started this biz a couple of months ago). When I run the marketplace tax collection report, there are a bunch of sales there, but I apparently don’t have to remit taxes for those?
Are the reports you are running in QB showing taxes due only for your sales in the state of FL? I’m assuming that you have had sales in other states. How do you handle those sales tax reports and payments? Should I just tell QB that I do not charge sales tax at this point, or will this all make more sense as I get further into the course?
Thank you!
Hi Rachel, You are not alone when it comes to confusion about sales tax. Since I am neither a CPA nor Tax Accountant, I can’t advise you on what you should or shouldn’t be collecting and remitting. However, I can tell you how to post sales tax collected in QB. The course shows how to setup the Sales Tax Items for the tax authorities you are registered with and liable for collecting. If you do not collect sales tax and remit it, you would not setup any sales tax items. If you are seeing only Marketplace Facilitator Tax collected on your reports, that means Amazon is only collecting for those states and/or you had no sales in States for which you collect sales tax. With so many states following the Marketplace Facilitators Tax model, I think we will eventually come to a point where we are not responsible for any of the sales tax for sales on Marketplace platforms. So, that throws a wrench in the registering with states for collection. There are CPAs who say, no need to sign-up and others that say Nexus, nexus, nexus. I would advise you to contact your CPA and get their advice. As far as QB, if you are not collecting, you have nothing to put into QB. 🙂
Thank you Vicki!