Ability to create Use Tax Code and Liability for US Customers
South Dakota's regulations require that if a product or service is purchased online or out-of-state and the use of that purchase is not intended for resale, the purchaser must remit a use tax, equivalent to the local sales tax rate, to the State Department of Revenue. None of the Quickbooks products offer an easy way to track this as a business liability.
My suggestion would be to add a sales tax-like setting where the local use tax rate could be established. Then, in all areas where a non-billable or capitalized expense is recorded, place a checkbox at the end of each GL account line asking if it should be tracked as a use tax liability item. If the box is checked, then Quickbooks can post a journal entry behind the scenes to record both an increase to expense and an increase to use tax liability.
The sales tax section would also need to be updated to include reports showing the details of the monthly use tax liability and the ability to reflect the sales and use tax liability payment as one combined figure which is how it is paid via ACH or check.
It is likely that SD is not the only state where use tax liability is an obligation.
The process I'm using to track this liability for our company is very cumbersome and at times unreliable but it is the best I've been able to come up with so far as a workaround to a liability situation which Quickbooks does not address. I'd be glad to provide copies of our SD State reports and the journal entries which I'm doing now as a starting point to a solution to this area.
As I see it, the backbone is already built in your system in that if a product, service or billable expense item is to be taxed, you check the box and Quickbooks does the calculations. Same concept but with non-billable expenses.
Thank you for considering this suggestion.
It would also be nice to be able to add "USE" Taxes because this is starting to be an issue, although businesses are not complying yet,
We need to track our out-of-state vendors, and then run a report to see how much we purchased from them.
Some states impose use (or usage) taxes on purchases that are shipped to you from a different state than the one in which you have your business. Generally, a use tax only applies to states that already have a sales tax. Its purpose is to equalize the tax burden when buying from in-state or out-of-state vendors.
Please add "Vendor Type" functionality found in the desktop version of Quickbooks.
Marie Tate commented
Need a way to view use tax. When the owner buys items that she uses I need to be able to put them in as if a client purchased them.
Track for Use Tax along with Sales Tax