United States: sales tax¶
What you'll do: set up a US company, define the sales tax jurisdictions you collect in, charge sales tax on invoices, and use the sales tax, use tax, exemption certificate and Form 1099 reports.
The US has thousands of local sales tax jurisdictions, and KhataOS can't ship their rates. You enter the rates you collect. The reports are a preparation aid; nothing is filed with any state or the IRS.
Set up¶
- Pick United States when the company first opens. The books are in USD, with calendar financial years.
Alt+K, Company details: the EIN (formatNN-NNNNNNN) and the company's state (required).- Tax rates (
C, Tax Rates): add one row per jurisdiction part you collect, with its rate and start date:
| Code | Means |
|---|---|
CA |
California's state rate |
CA-LA/COUNTY, CA-LA/CITY, CA-LA/DISTRICT |
the county, city and district parts of a local jurisdiction you name CA-LA |
CA:FOOD |
the state rate for the tax class FOOD (0 for exempt) |
A state with no row of its own is a state you don't collect in.
4. Duty ledgers under Duties & Taxes with Type of tax STATE, COUNTY, CITY or DISTRICT (one per part, or one ledger for all of them).
5. Customers: the customer's State in the mailing details is its jurisdiction, such as CA or CA-LA. A customer with no state is taxed at your company's state. A customer in another country is an export.
6. Items and service ledgers: the tax class is the taxability category. Classes starting with EXEMPT, NONTAXABLE or RESALE are never taxed.
Detail: US sales tax.
Sales tax on invoices¶
Enter a Sales invoice as usual. KhataOS adds up the jurisdiction's parts for each line and fills in the tax lines. If the customer has a valid exemption certificate, no tax is charged, and the invoice shows a note.
Reports¶
All in Go To (Alt+G), under Sales tax:
| Go To | What it shows | Keys |
|---|---|---|
| Sales tax by jurisdiction (US) | Tax collected per jurisdiction and part, with a note on states where sales may create nexus | |
| Use tax on untaxed purchases (US) | Purchases where no sales tax was charged, so use tax may be due | Ctrl+Alt+J sets where the goods are used |
| Exemption certificates (US) | Customers' resale and exemption certificates | Ctrl+Alt+A adds one, Ctrl+Alt+D removes one |
| Form 1099 vendors (US) | Vendors you may need to send a Form 1099 |
Ctrl+P prints and Ctrl+E saves a CSV. There is no nexus setup: the nexus note is a reminder to check.
The Desk shows federal and sales tax due dates. List your states and their filing frequency in the compliance profile, for example CA:Q, TX:M.
Not there yet¶
Rates looked up from an address, filing with states, Forms 1099 and W-2 files, and payroll.