Print Friendly, PDF & Email

How to Track Use Tax (tax paid at the point of purchase)

Many states require you to pay sales tax on purchases you make, even if you are planning to resell the products and collect sales tax from your customer. If you are required to pay use tax for out-of-state purchases that you will resell, you might also be able to deduct those amounts when you file your Sales Tax returns.

In Total Office Manager, you may track sales tax amounts paid to a vendor in a designated chart of account you have created for taxes paid on purchases then deduct the amount from your tax liability due when paying your sales tax to the tax authority.

Purchase Transaction Creation

Create the purchase transaction. Purchase transactions may be entered in one of the following ways:

  1. Bills
    a. Workflow Navigator | Vendors | Enter Bills.
    b. From the main menu Vendors | Enter Bills.
    c. CTRL + B
    d. Workflow Navigator | Vendors | Receive Items & Enter Bills.
    e. From the main menu Vendors | Receive Items & Enter Bills.
  2. Credit Card Charges
    a. Workflow Navigator | Banking | Credit Card Charge.
    b. From the main menu Banking | Manage Credit Cards | Credit Card Charge.
    c. From the Credit Card Credit/Charge List, right click and choose New Credit Card Charge.
  3. Checks
    a. Workflow Navigator | Banking | Write Checks.
    b. From the main menu Banking | Write Checks.
    c. CTRL + W
    d. From the toolbar, click Check or the image of a check.
    e. From the Check List, right click and choose New Check.

After entering the items you have purchased on the Items Tab, select the Chart of Account you have created for tracking the taxes you have paid on purchases in the account column on the Expenses Tab.

Paying Your Tax Liability

When it is time to pay your Sales Tax liability, run the Transactions Detail by Account (Reports | Accounting) for the Chart of Account used to track taxes paid on purchases for the period you are paying.

Enter a Sales Tax Adjustment (Customers | Sales Tax | Sales Tax Liability Adjustment) for the amount reported in the Chart of Account.

When paying your Sales Tax liability (Customers | Sales Tax | Pay Sales Tax), select the negative amount in the {Unknown Tax} along with the Sales Tax Items you are paying. This will reduce the tax liability reported on the sales tax payment.

Edit the Sales Tax Liability payment (Banking | Check List) to complete the check entry.

Sales Tax Websites by State

As each tax district (town, city, county, or state that charges sales tax) may have their own rules and regulations for collecting and paying sales tax, it is advised you speak with a qualified Tax Attorney with questions related to Sales Tax. For more information on specific state rules regarding Sales Tax regulations, please check your state and/or local tax authority websites.

  1. Alabama Department of Revenue: http://www.ador.state.al.us/
  2. Alaska Department of Revenue: http://www.revenue.state.ak.us/
  3. Arizona Department of Revenue: http://www.revenue.state.az.us/
  4. Arkansas Department of Finance and Administration: http://www.state.ar.us/dfa/
  5. California Franchise Tax Board: http://www.ftb.ca.gov/
  6. California State Board of Equalization: http://www.boe.ca.gov/
  7. Colorado Department of Revenue: http://www.taxcolorado.com/
  8. Connecticut Department of Revenue Services: http://www.ct.gov/drs/site/default.asp
  9. Delaware Division of Revenue: http://www.state.de.us/revenue/
  10. Florida Department of Revenue: http://dor.myflorida.com/dor/
  11. Georgia Department of Revenue: http://www.etax.dor.ga.gov/
  12. Hawaii Department of Taxation: http://www.state.hi.us/tax/tax.html 
  13. Illinois Department of Revenue: http://www.revenue.state.il.us/
  14. Indiana Department of Revenue: http://www.in.gov/dor/
  15. Iowa Department of Revenue and Finance: http://www.state.ia.us/tax/index.html
  16. Kansas Department of Revenue: http://www.ksrevenue.org/
  17. Kentucky Revenue Cabinet–Online Taxpayer Service Center: http://revenue.ky.gov/
  18. Maine Revenue Services: http://www.state.me.us/revenue
  19. Maryland: http://www.comp.state.md.us/default.asp
  20. Massachusetts: http://www.dor.state.ma.us/
  21. Michigan Department of Treasury: http://www.michigan.gov/treasury
  22. Minnesota Department of Revenue: http://www.taxes.state.mn.us/
  23. Mississippi Tax Commission: http://www.mstc.state.ms.us/
  24. Montana Department of Revenue: http://www.discoveringmontana.com/revenue/default.asp
  25. Nebraska: http://www.revenue.state.ne.us/index.html
  26. Nevada Department of Taxation: http://tax.state.nv.us/
  27. New Hampshire Department of Revenue Administration: http://www.state.nh.us/revenue/index.htm
  28. New Jersey Division of Taxation: http://www.state.nj.us/treasury/taxation/
  29. New Mexico Taxation and Revenue: http://www.tax.newmexico.gov/
  30. New York Department of Taxation & Finance: http://www.tax.ny.gov/
  31. North Carolina Department of Revenue:  http://www.dor.state.nc.us/
  32. North Dakota State Tax Department: http://www.nd.gov/tax/
  33. Oklahoma Tax Commission: http://www.oktax.state.ok.us/
  34. Oregon Department of Revenue: http://www.oregon.gov/DOR/
  35. Pennsylvania: http://www.revenue.state.pa.us/
  36. Rhode Island Division of Taxation: http://www.tax.ri.gov/
  37. South Carolina Department of Revenue: http://www.sctax.org/
  38. South Dakota: http://www.state.sd.us/drr2/Revenue.html
  39. Tennessee: http://www.state.tn.us/revenue/
  40. Texas Window on State Government–Texas Taxes: http://www.window.state.tx.us/m23taxes.html
  41. Utah State Tax Commission: http://tax.utah.gov/
  42. Vermont Department of Taxes: http://www.state.vt.us/tax/
  43. Virginia Department of Taxation: http://www.tax.virginia.gov/
  44. Washington Department of Revenue: http://dor.wa.gov/
  45. West Virginia Department of Revenue: http://www.wvrevenue.gov/
  46. Wisconsin Department of Revenue: http://www.revenue.wi.gov/
  47. Wyoming Department of Revenue: http://revenue.state.wy.us/

Sales Tax Related Help Topics

Tracking Sales Tax on Purchases (Use Tax)