Multiple Sales Tax Rates based on Dollar amount

Discussion in 'Quickbooks' started by Sean Dotson, Jun 14, 2005.

  1. Sean Dotson

    Sean Dotson Guest

    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
    Sean Dotson, Jun 14, 2005
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  2. Sean Dotson

    Sean Dotson Guest

    anyone? This has HAD to have come up before...
    Sean Dotson, Jun 15, 2005
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  3. Sean Dotson

    Tee Guest

    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.
    Tee, Jun 16, 2005
  4. Sean Dotson

    Tee Guest

    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.
    Tee, Jun 16, 2005
  5. Sean Dotson

    Sean Dotson Guest

    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.
    Sean Dotson, Jun 16, 2005
  6. Sean Dotson

    L Guest

    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.
    L, Jun 16, 2005
  7. Sean Dotson

    Tee Guest

    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
    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
    Tee, Jun 17, 2005
  8. Sean Dotson

    Sean Dotson Guest

    Sean Dotson, Jun 17, 2005
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