Question

Sales Tax Posting

Forum|Forum|10 months ago
August 26, 2025
1 reply
23 views

I have a dozen or so individual GL accounts set up for Sales Tax Payable, each GL account is a separate county. We perform work in many counties within the State so I want to separate how the tax posts to easily report it monthly. For over a year and a half I have been creating invoices in both our separate job cost system and in QBO. In the last month, I have used Erie County payable to post all invoices and QBO receipts tax amount to Erie County payable. Instead of posting to that account now, the tax portion is posting to another county's GL account. When I run the Balance Sheet the tax amounts are showing up (because they are posted there) in the wrong tax account making my reporting very difficult. I have checked every aspect of both accounts and cannot see why the Erie County tax is posting to the Alleghany tax GL account. Everything on the invoices and receipts show the correct tax account of Erie County and the correct rate. I thought maybe something got changed behind the scenes on the account or the tax account, but everything is reading correctly. Does anyone have any ideas on why this may be happening?

QuickBooks Online Advanced

M

mv32

Level 8

It seems your sales tax amounts are posting to the wrong GL accounts—taxes meant for Erie County are appearing in the Alleghany tax account, @ChrisMc29. While your invoices and receipts display the correct tax account and rate, the GL sales tax payable accounts you’ve set up for counties won’t impact how QuickBooks posts the tax amounts unless you’ve manually created the sales tax as a service item, assigned the GL sales tax payable account as the income account, and added this service item to each invoice.

Could you also provide more details on how you’ve been using the Erie County payable account to post invoices and receipts tax amounts in QuickBooks Online (QBO)? Understanding your process will help us identify why the tax amounts are posting to the Alleghany sales tax payable account instead of Erie County.

In the meantime, to determine the cause of why it was posted to the wrong account, here are some steps to help identify and resolve the issue:

Check Your Sales Tax Settings in QuickBooks Online
1. Go to My Apps > Sales Tax > Sales Tax Settings in QBO.
2. Keep in mind that Erie County sales tax payables are posted to the "New York Department of Taxation and Finance" agency, which is also the default account used by the system. If you’re using a custom tax rate, go to the Custom Rates section and click Edit under Action to check if it’s assigned to the correct tax agency account. If it’s incorrect, you won’t be able to change it to the correct agency. Instead, make the rate inactive by clicking the dropdown button beside Edit and then selecting the dropdown beside Add agency to create a custom agency tax rate. Be sure to update previous invoices and assign the new custom agency tax rate to ensure accuracy.
Run the Sales Tax Liability Report
1. Go to Apps > Sales Tax > Overview > Reports > Tax Liability Report.
2. This report breaks down sales tax amounts by tax rate and tax agency name. It’s a great way to check if the system is calculating taxes correctly and identify where amounts are being assigned.

Let me know if you need help with any of these steps or contacting support.

C

ChrisMc29Author

I checked everything you mentioned. The odd thing is the Tax Liability Report shows the tax in Erie County, but when you go to the Balance Sheet or Chart of Accounts the amount is in the Alleghany Tax Payable account.

When I post an invoice for Sales Receipt the sales tax for the county is selected using the drop down box (Select Sales Tax rate). It is the correct sales tax and the correct calculation of Erie, but the line item is appearing in the Alleghany Sales Tax GL.

Z

ZackE_

Moderator

Thanks for getting back with the Community, ChrisMc29. I appreciate you performing Jovychris_A's steps.

Since you're still unsure why sales tax is posting to a specific tax payable account, I'd recommend working with a tax professional to identify what's causing it to occur. If you're in need of one, there's an awesome tool on our website called Find a ProAdvisor. All ProAdvisors listed there are QuickBooks-certified and able to provide helpful insights for driving your business's success.

Here's how it works:

Go to our Find a ProAdvisor page.
Use the City or ZIP search field to specify a location.
Select Find a ProAdvisor.
Browse through your results and find one that works best for the business. You can click on each ProAdvisor's profile to learn more information about them.

Once you've found a tax professional, they can be contacted through their Send a message form.

You'll also be able to find many detailed resources about using QuickBooks in our help article archives.

Please don't hesitate to send a reply if there's any additional questions. Have an awesome Tuesday!

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