Sales Tax with GnuCash

[Pablo Francesca]

I'm no expert, but this worked for me.(windows, version 2.2.9)

Assuming a US based business, try this:

First set up a tax table: Business->Tax Table Editor.
Click the New button underneath Tax Tables.
Name your Tax Table (Ex: Anystate-AnyCounty-AnyCity)
Make sure Percent is select and input your relevant percentage in the value box

This next step is crucial. Select an account from the Account list box.  This is the account where the sales taxes will  be posted. This is usually Liabilities: Sales Tax. After you click OK, it will show up in the Tax Table Entries side of the window for editing later if you need to do this.

Now, you can use your tax tables.  When creating an invoice, ensure that the Taxable column is checked.  In the Tax Table column, select the appropriate tax table.  The tax will automatically be calculated and you can see the total in the far bottom left of the screen and the taxed amount in the tax column.

Go ahead and save and post your invoice.  Now, what just happened?
The invoice was posted to accounts receivable for the full amount and this will be reflected in your customer reports.  The sale will be credited but without the sales tax. There will also be an entry in a the account associated in the tax table to reflect the tax.  In our example, this was Liabilities: Sales Tax.   In accounting terms, we debited A/R and created a split credit in an income account and a liability account.  For example, if your invoice total was 100, and your sales tax was 5 percent, A/R would be debited 105, Income: Sales might be credited 100 and Liabilities: Sales tax would be credited 5.

So now you have a tax liability automatically created in which you can pay whenever you need. Just move your funds from the relevant asset account to extinguish the liability.

I hope this helps.  Once it is set up right, it works nicely, kinda like Quickbooks.  I hope my attempt to be thorough was helpful, I struggled finding relevant documentation, but after playing around with it, figured out how it worked.

--- On Fri, 12/11/09, J. Anthony Hertzler <plant.sequoias at gmail.com> wrote:

From: J. Anthony Hertzler <plant.sequoias at gmail.com>
Subject: Sales Tax with GnuCash
To: gnucash-user at lists.gnucash.org
Date: Friday, December 11, 2009, 4:36 PM

Hi, I'm unable to find anything in the gnucash documentation about
setting up sales tax tables for a business. I run a small portable
building business, so we're both manufacturers and retailers. We charge
the customer sales tax, so it needs to be listed as a liability until
it's paid to the state at the end of each month.

Since each taxable sale typically includes a percentage of state tax,
county tax, and possibly city tax, it would be great be able to set up
all the common state/county/city combinations and be able to choose one
to automatically funnel the taxes to the proper liability accounts at
the time I enter the amount of a sale into the checking account. Then at
the end of the month I need to be able to list the sales tax totals for
the state and for each county and city to which sales tax is owed.

Is this something gnucash can do at present? Please shed some light on
this for me, or point me in the right direction. Thanks.

Anthony Hertzler
Integrity Buildings

_______________________________________________
gnucash-user mailing list
gnucash-user at gnucash.org
https://lists.gnucash.org/mailman/listinfo/gnucash-user
-----
Please remember to CC this list on all your replies.
You can do this by using Reply-To-List or Reply-All.