Sales tax on a cash basis

Two reports show sales tax. "Sales tax summary" counts tax on invoices issued in the period. "Sales tax, cash basis" counts tax on money collected in the period, less refunds. Use the one your tax office asks for.

Before you start #

• Only owners, managers and advisors can run money reports.
• Invoices carry their tax lines. See "Tax rates and invoice tax".
• Ask your accountant or tax office which method you file under. Pop Dispatch follows the rule below and you stay responsible for what you file.

Steps #

1. Open Reports and choose "Sales tax, cash basis".
2. Choose the first and last day.
3. Run it. Each row is one tax, with its rate, the number of invoices with money in or out, "Money collected, less refunds" and "Tax on that money".
4. Download it as CSV or print it, as with any report.
5. To compare with the other method, run "Sales tax summary" for the same dates.

The rule #

• Each payment received in the period carries its share of each tax line: the payment times the tax, divided by the invoice total. It rounds half up.
• Each refund recorded in the period takes its share back.
• A payment refunded later still counts in full for the period it arrived in. A period you already filed does not change when a refund comes later.
• A credit note moves no money and carries no tax.
• Void invoices are left out.

Worked example #

An invoice for 1,000.00 plus 100.00 sales tax totals 1,100.00.

• In November the customer pays 550.00. Cash basis counts 550.00 collected and 50.00 tax for November. The accrual Sales tax summary counts the full 100.00 tax in November, the month the invoice was issued.
• In December the customer pays the other 550.00. Cash basis counts 550.00 collected and 50.00 tax for December. The accrual summary shows nothing new for this invoice.
• Later in December you refund 110.00 on a payment. Cash basis for December counts 550.00 less 110.00, which is 440.00 collected, and 50.00 less 10.00, which is 40.00 tax.

If something goes wrong #

• "This report is for owners, managers and advisors": ask one of them to run it.
• The cash figure differs from the summary: that is expected, because the two reports count different things. Compare them with the example above.
• "from must not be after to": swap the dates.