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Old 12-26-2016, 08:42 PM
tvmangum tvmangum is offline
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Location: North Carolina
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Sales taxes paid by NPO

I have to prepare a form to request reimbursement from the State Department of Revenue for sales taxes the PTA has paid from 7/1/16 to 12/31/16. What is the best way to generate this information?

Should I create a class for taxable purchases or just use one of the "canned" reports, like the Expenses by Vendor Detail, export it to Excel and then clean the data leaving only taxable purchases and the sales tax paid in the spreadsheet? I currently use classes to track certain types of income (ex. specific fundraisers, etc.) and I may have used those classes on purchases. I'm just trying to figure out the easiest way to produce this data as I have to do this report every 6 months.

As always, any suggestions are appreciated.
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Old 12-26-2016, 09:26 PM
Lorin Browning Lorin Browning is offline
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QuickBooks CLASS tool could be helpful, but most not-for-profits use it to distinguish between types of functional expenses. I really don't like using that tool for differing purposes when there are alternatives.

Look at the report to see what is required.

I would strongly urge you to add Sales Tax Paid as an account to your chart of accounts if you have not already done so.

When recording sales, you should have distinguished between the net taxable sale and the sales tax on those sales. Run a report Profit and Loss report filtered on Sales Tax Paid. This would probably be the easiest method. That will give total sales on which sales tax is paid plus the total amount of sales tax paid.

Some states require total sales by county, plus sales tax paid per county. This is especially the case where there are sales in multiple counties with differing sales tax rates. If this is your situation, you may need to filter also by counties. If this is you case, have a subaccount of Sales Tax Paid for each county to which in-state sales tax is paid. (Suggestion: If your report requires reporting by county number, use the county numbers as part of your subaccounts names.)

Some states allow a not-for-profit to be exempt on paying sales tax. If your state does, apply for the exemption and you won't have to worry about filing the report.
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Old 12-26-2016, 09:56 PM
tvmangum tvmangum is offline
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I already have two sales tax paid accounts since the State charges two different rates depending on the item.

When I enter transactions, I put the taxable amount on it own line and charge it to the line item (ex. concession expenses, etc.) and then put the sales tax paid on a different line applying the charge to the correct tax rate percentage. (The attachment, purchase.png, shows how I enter a transaction with sales tax.) When I run the Profit and Loss report filtered on sales tax I get a list of all of the taxes paid based upon the rate--but not the taxable amount.

Fortunately, we pay all of our sales tax in the same county so that is not an issue. I would like to use our tax exempt number but I was told it was better for the county and the school system, booster clubs, etc. to pay the sales tax as it increases the amount coming back to the county and can, in the end, increase the amount of money to the schools. Don't know if that is still the fact.

I did export the Expenses by Vendor Detail Report to Excel and was able to get what I needed and the tax amounts paid matched what I had in QB.
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File Type: png Purchase.png (4.4 KB, 2 views)
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Old 12-26-2016, 11:12 PM
Lorin Browning Lorin Browning is offline
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Another possibility: Try running a General Ledger report filtered on the two sales tax paid accounts. That report should give you the taxable amount.

You posted: ". . . I was told it was better for the county and the school system, booster clubs, etc. to pay the sales tax as it increases the amount coming back to the county and can, in the end, increase the amount of money to the schools." I think someone is telling you something that he or she does not understand fully. The state is not going to send to the counties more sales tax that it nets. Any sales tax collected by the state is coming back to the county or school system is going to be based on net collections -- where "net collections" is defined as sales tax collected less sales tax refunded to tax exempt entities. Your PTA paying sales tax when it doesn't have to is not going to increase the amount of money to the schools. The net sales tax (not the gross sales tax) is what is divided by the state and some of that (possibly) goes for education.
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Last edited by Lorin Browning; 12-26-2016 at 11:25 PM.
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