Multiple Sales Tax Rates based on Dollar amount


S

Sean Dotson

Here in FL if you make a sale over $5k the first $5k is taxed at the full
county rate (6.5%) and the remainder is taxed at the state rate (6%).

So if I have a line item of $10,000 how would I go about showing this on an
invoice?
 
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T

Tee

Sean Dotson said:
Here in FL if you make a sale over $5k the first $5k is taxed at the full
county rate (6.5%) and the remainder is taxed at the state rate (6%).

So if I have a line item of $10,000 how would I go about showing this on
an invoice?
AFAIK QB cannot do this in the normal way. You can setup a tax item for
6.5%, one for 6% and setup a No Tax item. On an invoice with a line item
for $10,000 cut it in half by using $5000 on the first line for the item.
Then enter the 6.5% tax item. This will calculate tax on $5000. Next enter
the same sale item again but this time for the remaining $5,000. Next enter
the 6% tax item. This will calculate tax on the balance. Its not as neat
but its a feasible workaround and the tax will still be recorded to your
Sales Tax Payable ledger.
 
T

Tee

I forgot to say that in order to do the separate line item tax entries
you'll need to change the customer tax (the one showing at the bottom of the
window) to No Tax or Zero Tax first. Otherwise it'll flag you that your
standard 6.5% is already in use and it'll also continue to calcluate the
6.5% on the invoice total.
 
S

Sean Dotson

Thanks. But how do you apply a different tax rate per line. On my invoice
I have a tax column but it only specified Tax or NoTax.
 
L

L

Sean Dotson said:
Thanks. But how do you apply a different tax rate per line. On my
invoice I have a tax column but it only specified Tax or NoTax.
You don't
You enter the item you sold and the 5k max for the higher rate and mark the
item taxable
The next line is a sales tax ITEM you set up in the item list, such as
'California 6.5 base tax rate' valued at 6.5%
The next line is the balance of the sale, marked taxable.
A fourth line is the sales tax item you set up in the item list, such as
'California 6 percent tax', valued at 6%.

If you have multiple items above the tax item, you have to use the subtotal
function - otherwise the sales tax item only includes the line directly
above it.

You MUST use a zero rate sales tax code at the bottom of the screen, to
default taxable rate to zero percent.
 
T

Tee

L reiterated my previous post but in case you are confused, you must setup
new Sales Tax Items inside your Item List.

Go to Item List, New Item, Sales Tax Item, enter the rate and agency its
payable to. You'll create 3 of these:

1. 6.5% Sales Tax
2. 6% Sales Tax
3. No Tax (if it doesn't already exist)

Now, on an invoice:

*First go to the bottom and change the tax rate to No Tax. Now to enter
items:
Expensive Widget .5 (qty) 10,000 (cost) 5,000
6.5% Sales Tax (it will calculate on the $5,000 automatically)
Expensive Widget .5 (qty) 10,000 (cost) 5,000
6% Sales Tax (it will calculate on the above automatically)


If you have a multiple sale item invoice then you'll need to use subtotals
as L stated:

*Set bottom tax rate to No Tax
Cheap Widget 1 (qty) 100 (cost) 100
Cheaper Widget 1 (qty) 50 (cost) 50
Expensive Widget .5 (qty) 10,000 5,000
Subtotal (this is a line item entry found in your Items List)
6.5% Sales Tax
Expensive Widget .5 (qty) 10,000 5,000
6% Sales Tax
 
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