Apply for Sales Tax Exemption and Get Refund Back in QuickBooks

Have you any idea about the sales tax exemption, and its refunding process in QuickBooks? If you have no idea about this then no problem, this article will let you know, how to apply or request for sales tax exemption & refund in QuickBooks.

In request sales tax exemption and refund in QuickBooks from any services or product orders, you will get your refund of the sales tax that intuit charged. This also permits intuit to modify your account as a sales tax exempt.

How to Apply for Sales Tax Exemption & Refund in QuickBooks

Here are the procedure to apply the sales tax exemption, and refund, have a look;

To Apply Sales Tax Exemption in QuickBooks

If you have organized sales tax in QuickBooks, and want to refund request, then you have to follow these points which are given below along with the documentation:-

  • Account information like Company ID, Customer Account Number (CAN), Federal EIN if it is specific to payroll services
  • If there is an order number available
  • You purchased a product or service

When You Send the Required Documents then What Happens?

  • The status of the account will be modified to sales tax exempt. It may take for account modification 5 to 10 business days. 
  • When you are done with your account modification to sales tax exempt, you can’t see any longer sales tax charges on future orders or service fees.
  • When we receive and verify a copy of your tax-exempt certificate then refund requests for sales tax exemption on products or services can be processed only from intuit you purchased. We can refund sales tax when we are limited or far back.
  • Refund request totally depends on your mode of payment because it takes some time for processing and it depends also on how fast your financial institution is able to post the transaction.

To Get Back Refund Sales Tax Collected from Tax-Exempt Customers

You offer good services to collect taxes for which you may be required. If you want to monitor easily the appropriate tax collecting agency then you need the help of QuickBooks Desktop because it keeps an accurate record of these taxes.

It is a part of series on sales tax and covers the usual sales tax workflow in QuickBooks desktop:-

  • Set up sales tax
  • Collect sales tax
  • Review sales tax reports
  • Pay sales tax

If you want to complete other sales tax-related tasks then it helps you:-

  • Handle cash basis sales tax
  • Process sales tax adjustment
  • Show multiple sales tax items on an invoice
  • Refund sales tax collected from tax-exempt customers
  • Track sales tax on purchases from vendors

If you face any kind of issues while working on your sales tax then you have to resolve common sales tax issues as soon as possible.

If you charge sales tax for a tax-exempt customer by mistake then you need to process a refund for them utilizing one of the options which are given below:-

Option 1: Credit sales tax which is charged to a sales tax-exempt customer

  1. Create a credit memo
  • First of all, in the customer’s menu create credit memos/refunds.
  • After that, enter information that is needed and make sure that the credit memo matches the original invoice items and quantity.
  • Move ahead, you enter the recent date.
  • At last, choose to save and close.
  1. Create new invoice
  • In the first step, from the customer’s menu created invoices.
  • Now, enter information that is required and make sure that new invoices match the original invoice for the same items then utilizing today’s date and mark them Non-Taxable.
  1. Choose the Received Payments window and apply the existing credit to the invoice

It leaves the credit balance only for the amount of the sales tax that is applied to a future invoice or refunds the check.

Also, the sales tax liability report will display the taxable sales decrease by the amount of the credit memo. The non-taxable sales added by the amount of the corrected invoice.

Option 2: Modify Original Invoice

First of all, you have to change the item from Taxable to Non-Taxable on the original invoice because it decreases the sales tax amount. It will be displayed on the customer payment screen when it is an overpayment. You can create a credit for this by processing a refund.

Option 3: Create a Credit Memo

  • First of all, in the customer’s menu create credit memos/refunds.
  • Enter the item you sold and the quantity you make it Taxable.
  • At last, you enter the item you sold and also enter the negative number for the Quantity and make it Non-Taxable.

Option 4: You Enter a sales tax adjustment to zero and out the sales tax due

If you want to enter a sales tax adjustment to zero out the sales tax due then follow these instructions which are mentioned below:-

  • Firstly, go to the Vendors menu and choose Sales Tax>Adjust Sales Tax Due
  • After that, set the date of adjustment to the date where you want to start tracking sales tax in the window of Sales Tax Vendor.
  • Now, select the sales tax agency you pay sales tax to from the drop-down button of Sales Tax Vendor.
  • Then, you set the adjustment account.
  • When you enter the amount of Sales Tax to be adjusted firstly, ensure that Reduce Sales Tax is chosen.
  • After that, enter a note about the adjustment in the memo field.
  • At last, choose the ok button to finish.

Final Thought

At the end of this article, we hope you find it informative, and now you can request the sales tax exception & refund in QuickBooks. We have tried our best to make the process simpler for you, still, if you are facing any kind of obstacles to apply sales tax exemption & refund in QuickBooks then you can get our QuickBooks support to troubleshoot your problem at any time and anywhere through our experts.

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