![]() If your business has nexus or a presence in more than one location, you might need to collect and remit sales tax for other states as well. Each state has different rules and requirements, so it’s best to check with the state you do business in to understand their requirements. If you sell a physical product or a service that isn’t exempt from sales tax, you may need to collect sales tax on sales within your state and possibly on sales outside of your state. Most states enforce sales tax on some goods and services. Since the sales tax regulations vary across different states, it’s common for businesses to have separate sales tax liability accounts for each state. The amount of sales tax depends on the state, city and country your business has a physical presence in. It’s charged as a percentage of the selling price and is collected at the time of the sale. Sales tax is imposed on the price of some goods or services. If you need income tax advice please contact an accountant in your area. NOTE: FreshBooks Support team members are not certified income tax or accounting professionals and cannot provide advice in these areas, outside of supporting questions about FreshBooks. What Type of Account Is Sales Tax Payable?.What Is the Journal Entry for Sales Tax?.This is why it’s known as a pass-through tax. ![]() The sales tax is then remitted to the state or local government within a prescribed period. Sales tax is the tax that businesses impose on customers when they purchase goods and services. Send invoices, track time, manage payments, and more…from anywhere. Pay your employees and keep accurate books with Payroll software integrationsįreshBooks integrates with over 100 partners to help you simplify your workflows Set clear expectations with clients and organize your plans for each projectĬlient management made easy, with client info all in one place Organized and professional, helping you stand out and win new clients Track project status and collaborate with clients and team members Time-saving all-in-one bookkeeping that your business can count on Tax time and business health reports keep you informed and tax-time readyĪutomatically track your mileage and never miss a mileage deduction again Reports and tools to track money in and out, so you know where you standĮasily log expenses and receipts to ensure your books are always tax-time ready ![]() Quick and easy online, recurring, and invoice-free payment optionsĪutomated, to accurately track time and easily log billable hours Wow clients with professional invoices that take seconds to create
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