QuickBooks Sales Tax Liability Report

How to run it

Intuit's steps for checking how much sales tax you owe start here. Go to Reports, then Standard reports, and search for Sales Tax Liability. Pick the Report period, choose a Tax Agency from the dropdown (All, or the one agency you are filing for), and select Run report.

The Tax Amount column shows the tax collected at each rate, whether state, county, city or district. Select any tax amount and QuickBooks opens the transactions behind it, with the customer, the date and the rate applied to each sale. That drill-down is where most questions about the report get answered.

If the amount you actually pay an agency differs from what the report says, Intuit's route is a tax adjustment, which covers things like tax credits, discounts and corrections. The adjustment belongs in the Sales Tax Center when you record the payment, not as an edit to the sales themselves.

What each column counts

Intuit's article on understanding the report defines five columns, and most misreadings come from assuming one of them means something it doesn't.

Tax Name separates the lines by jurisdiction, with a line for each state, county and city tax that applies.

Gross Total is "the total net value (no sales tax included) of all sales, taxable and non-taxable." Invoices and sales receipts increase it. Credit memos and refund receipts reduce it. It is not your total income, and it never includes the tax itself.

Non-Taxable Amount holds the sales QuickBooks treated as non-taxable. Intuit lists four ways a sale ends up here: the customer is tax exempt, tax was not selected on the sales form, the product or service is marked non-taxable, or the item is mapped to a non-taxable category.

Taxable Amount is the net amount of the taxable transactions.

Tax Amount is "the sales tax charged on taxable sales, which also shows the sum total you owe."

What it leaves out

Intuit is explicit: "Transactions that aren't sales forms, like bank deposits and journal entries, aren't included on the sales tax liability report." The report is built from invoices, sales receipts, credit memos and refund receipts, and from nothing else.

That has two practical consequences. First, any sale recorded as a deposit or a journal entry is invisible to it, so the report's Gross Total can be lower than the income on your Profit and Loss for the same period. That is expected, not a data error, as long as you know which transactions account for the gap.

Second, the report only knows about tax QuickBooks itself charged on a sales form. If your tax was calculated somewhere else and posted to a liability account as an amount, it is not sales tax as far as this report is concerned. The liability account balance on your balance sheet is then the number to reconcile, and the report's Tax Amount column will not agree with it.

Reading it when Stripe charges the tax

When Stripe Tax calculates and collects your sales tax, the jurisdiction breakdown already exists, in Stripe. Stripe's itemized tax exports carry, for every line, whether it was taxable, the non-taxable amount, and a taxability reason such as standard rated, customer exempt or product exempt. That is the same information the QuickBooks report is trying to assemble, taken from the system that actually charged the customer.

So the two reports answer the same question from different sources. If Stripe charges the tax and your QuickBooks products are set up as non-taxable, the QuickBooks report will show those sales in the Non-Taxable Amount column with little or no Tax Amount against them, while the tax itself sits in a liability account. That combination looks alarming the first time you see it. It is the expected result of letting one system own the tax, and it is why the fix is never to start marking products taxable in QuickBooks.

The number worth checking each month is not the QuickBooks report's Tax Amount. It is whether your sales tax liability account balance agrees with the tax Stripe reports for the same period, before and after each filing.