Sales Tax: Using Multi-Rate Tax Codes

Tax FAQs | Tax Reports | Tax Overview

A Point of Sale tax code can include up to three separate tax rate components, each collecting a portion of the total tax rate.

This allows you to track taxes payable to different agencies (city, county, and state, for example) and/or to collect tax for each component based on item unit price thresholds or price ranges.

Your sales tax reports can be set up to sort and subtotal taxes by tax agency or tax components, depending on how you have to report and pay them.

To set up a multi-rate tax code in Point of Sale, follow the instructions provided here.

Alternative Method of Collecting Taxes for Multiple Agencies

This method requires that you are integrated with QuickBooks Desktop financial software. You collect a single combined tax rate in Point of Sale and use a tax group in your financial software to break out the taxes payable to each agency on tax reports.

Example: You are required to collect and pay 0.5% sales tax to your city, 1.5% to the county, and 5.25% to the state.

1. In QuickBooks Desktop, set up a sales tax group, comprised of the three agencies and individual rates. Refer to your QuickBooks Desktop documentation or in-program help for instructions.

2. In Point of Sale, set up a sales tax code, selecting Single-Rate Tax and entering just the total combined tax rate (i.e. 7.25%). The agency name you enter for the Point of Sale tax code wont effect how the information is transferred to QuickBooks Desktop but will show up on sales tax reports ran in Point of Sale. You may want to enter Combined Sales Tax or similar.

3. In the QuickBooks Information area of the Edit Tax Calculation page in Point of Sale, select the QuickBooks tax group from the drop-down list labeled Assigned to QuickBooks Tax Item/Group, and then select the corresponding QuickBooks tax code in the second drop-down list.

Sales taxes collected in Point of Sale are sent to QuickBooks Desktop and your sales tax reports in QuickBooks Desktop will separate the taxes due to each agency.

Notes:

- When printing a receipt where multiple tax rates have been collected, the Tax % field is left blank.

Related Topics

Use sales tax codes

Sales tax integration with QuickBooks Desktop