In QuickBooks, how can you track income that will never reach the bank for sales tax purposes. Company sells tractors and buyers finance them. Tractor company only receives the net. But must pay the sales tax. How do you handle this?

ANSWER

The BIDaWIZ Team's Answer:

How are you booking the transaction exactly and is sales tax being calculated based on the invoice amount (refer to preferences in QuickBooks)?

Since the full amount is taxable then we would be entering an invoice for the full amount to get the sales tax working correctly, then applying a credit or discount to reduce the payable amount, pointing to the appropriate account where you are clearing the payments from the financing company.

We would label the line item as a financing credit or financing prepayment. Provide a description for the line item for your records.

References: Quickbooks Software
State: Arizona