United States pack (`khata-us`): sales tax, use tax, certificates and Form 1099¶

KhataOS can keep books for a US business that collects state and local sales tax. It checks EIN, SSN and ITIN formats, works out sales tax per jurisdiction from the jurisdictions and rates the company sets up, reports the tax collected by jurisdiction and state with an economic nexus early warning, keeps customers' resale and exemption certificates (and treats their sales as exempt), works out the use tax to self-assess on untaxed out-of-state purchases, and lists the vendors that need a Form 1099. Nothing here is tax advice, and nothing is filed with a state or the IRS: check the figures with your accountant before you file.

Code: crates/khata-us (states.rs, ein.rs, sales_tax.rs, nexus.rs, returns.rs, use_tax.rs, exemptions.rs, form1099.rs), apps/desktop/src-tauri/src/tax_us.rs (vouchers into the crate's documents; the sales_tax_report_us(from, to), use_tax_report_us(from, to, jurisdiction), us_certificates(ledger_id), set_us_certificates(ledger_id, certificates), certificate_report_us(as_of, within_days) and form1099_us(year) commands) and apps/desktop/src/screens/tax_us.ts (UsSalesTaxReportScreen, UsUseTaxReportScreen, UsCertificatesScreen, addCertificate, Us1099ReportScreen). All four screens are in Go To (Alt+G) under "Sales tax" for US companies (see Where it is in the app). Sources, confidence tags and open questions: docs/research/us-compliance.md.

Why the company defines its own rates¶

There is no federal sales tax or VAT. Sales tax is levied by 45 states and DC and by roughly 11,000 to 13,000 local jurisdictions (counties, cities, special districts) whose rates change every quarter, with taxability rules that differ by product and state (research §1, §3, §4). KhataOS cannot ship or maintain that data. The pack instead takes the company's own list of the jurisdictions it collects in, with each component's rate, effective-dated like every other rate in KhataOS, and adds the components up per line.

Setting up a US company¶

Pick United States. The books use USD (2 decimals, "$") and calendar years. A business may use any fiscal year (IRS Pub 538), but the app has no setting to change the first month yet.
Company → Company details (Alt+K): the EIN (NN-NNNNNNN, 9 digits; the IRS publishes no check digit, so only the format is checked) and the company's state (USPS code, one of the 50 states and DC). The state is required: invoice_tax needs the company's region because the pack has regions.
Rates (Company → Tax rates). Keys, all looked up exactly:

key	component	meaning
`CA`	`STATE`	the state rate (7.25% in California)
`CA-LA/COUNTY`	`COUNTY`	a local jurisdiction's county part
`CA-LA/CITY`	`CITY`	its city part
`CA-LA/DISTRICT`	`DISTRICT`	all its special districts together
`CA:FOOD`	(state)	the state rate for tax class `FOOD` (0 = exempt in that state)

CA-LA is a code you choose: the state, -, and up to 12 letters or digits. A state with no XX key is a state you do not collect in: sales there carry no tax and show as "not collected" in the report. States with no statewide tax (AK, DE, MT, NH, OR) can still have AK = 0 plus local keys. 4. Duty ledgers: create a Duties & Taxes ledger per component you collect and set its type of tax to STATE, COUNTY, CITY or DISTRICT (one ledger can collect everything if you prefer: set it to STATE and the others too). 5. Customers: the customer's address region is its jurisdiction: CA (state tax only) or CA-LA. A customer with no region is taxed at the company's state; a customer whose address country is not US is an export (no tax). 6. Items and service ledgers: the tax class is the taxability category. Classes starting with EXEMPT, NONTAXABLE or RESALE are never taxed (use one for resale/exemption-certificate sales and marketplace sales the marketplace collected on). Any other class (or none) is taxable at the combined rate, unless a STATE:CLASS override says otherwise.

Example¶

California company, Los Angeles customer, rates CA 7.25, CA-LA/COUNTY 0.25, CA-LA/CITY 0.75, CA-LA/DISTRICT 1.25: a $100 taxable line gives STATE 7.25 + COUNTY 0.25 + CITY 0.75 + DISTRICT 1.25 = $9.50. The combined tax is rounded to the cent (half away from zero) and split over the components so they always add up to it. States set their own rounding rules; this is a common convention, not a rule of any one state [UNCERTAIN].

The sales tax report¶

sales_tax_report_us(from, to) lists, per jurisdiction and per state: gross sales, exempt sales, not collected (no rate on file), taxable sales and tax collected (the amounts on STATE/COUNTY/CITY/DISTRICT ledgers). Credit notes reduce the period they are dated in; cancelled vouchers are left out; exports are one total. Each state's return has its own form and lines; use these figures to fill it.

Economic nexus early warning. Since South Dakota v. Wayfair (2018) a state can require collection once a remote seller's sales pass its threshold. For the five states with a threshold sourced from the state (research §2) the report compares this calendar year to date with it:

State	Threshold	State's own measure
CA	more than $500,000	preceding or current calendar year
TX	$500,000 or more	preceding twelve calendar months
NY	more than $500,000 and more than 100 sales	preceding four sales tax quarters
FL	more than $100,000 (taxable remote sales)	previous calendar year
WA	more than $100,000	current or prior calendar year

The measuring periods differ, so this is a warning, not a determination. Sales into a state with no rate on file are listed with a warning.

Exempt by certificate. A sale to a customer that has a resale or exemption certificate for the sale's state, in force on the sale's date, counts as exempt (its taxable lines move to exempt sales and are also shown as "of which by certificate", since many returns ask for sales for resale separately). If tax was charged on such a sale anyway, the report still counts it as collected and warns.

Exemption and resale certificates¶

Kept per customer ledger (us_certificates, set_us_certificates; khata_us::exemptions): one record per certificate with

Field	Meaning
state	the USPS code the certificate is for (one state per record; add one per state for an SST or MTC multistate form)
number	the buyer's permit, registration or exemption number
kind	`Resale`, `ExemptOrganization`, `Government`, `Other`
issued	the date you received it (optional; it covers sales from then)
expires	the last day it is good for; blank when the state sets no date
note	free text (where the scan is kept…)

KhataOS does not know each state's renewal rule (SST blanket certificates last while sales recur within 12 months; Florida's annual resale certificate expires on 31 December; others vary): enter the expiry the state gives. Exemption Certificates (certificate_report_us(as_of, within_days), screen UsCertificatesScreen) lists every certificate, expired first, then those expiring within the window (60 days by default), then valid ones and those without a date; Ctrl+Alt+A adds one, Ctrl+Alt+D removes the one under the cursor.

Synced as shared records. Certificates are a shared record of the company (us.exempt.<ledger id>, JSON): not in the books, but synced to the company's other devices, the office server and accountant files, last change wins (docs/sync-settings.md). They are not in exports yet. A company shared as Viewer can't change them.

Use tax¶

use_tax_report_us(from, to, jurisdiction) (khata_us::use_tax, screen UsUseTaxReportScreen) lists the use tax to self-assess on purchases (Purchase vouchers; Debit Notes as returns):

only purchases with no sales tax on them (no STATE/COUNTY/ CITY/DISTRICT ledger) from vendors outside the company's state: the vendor's address region (state part) is another state, or its country is not the US. Untaxed purchases from vendors in the company's own state are counted and warned about (the vendor should have charged tax; if it did not, use tax is owed on them too);
stock-item lines are taken as bought for resale (no use tax); other lines (expense or asset ledgers) are taxed by their ledger's class at the rates of the jurisdiction where the goods are used: by default the company's state; jurisdiction (e.g. CA-LA, within the company's state, remembered as a shared record of the company; Ctrl+Alt+J on the screen) adds its local components. EXEMPT…/NONTAXABLE…/ RESALE… classes and 0% state overrides are exempt;
vendors without a state on file are left out with a warning.

The report is the liability by purchase and by component; it is not posted. Book it (Dr the expense or asset, Cr a "Use tax payable" ledger) and pay it with the sales and use tax return (or the state's consumer use tax return). The use tax rate is the sales tax rate where the goods are used (e.g. CDTFA Publication 123) [MEDIUM]; services are subject only where the state taxes them, which the ledger's class must say.

Form 1099 list¶

form1099_us(year) totals Payment vouchers to parties under Sundry Creditors in the calendar year and lists those at or over the threshold:

$600 for payments made through 31 Dec 2025; $2,000 for payments made after 31 Dec 2025 (One Big Beautiful Bill Act, P.L. 119-21, s70433, amending IRC s6041(a) and s6041A(a)(2)), indexed for inflation for years after 2026 — the list warns to check the IRS figure from 2027.
Payments in 2026 on are labelled 1099-NEC box 1a (the 2026 instructions renamed box 1). Royalties ($10) and rents are supported by the crate but the desktop treats every payment as nonemployee compensation for now.
The payee's TIN is its ledger's tax ID (EIN, or SSN/ITIN in NNN-NN-NNNN form); a payee without one gets a "request a Form W-9" warning (backup withholding is 24% without a TIN). EINs with a prefix the IRS no longer assigns are flagged, not refused.
KhataOS cannot tell corporations (generally not reported, except for legal services) or card / payment-app payments (reported on 1099-K by the processor) from others: the user decides who gets a form. No IRIS or FIRE file is produced.

Not modelled¶

Certificate scans, per-state certificate forms, use tax credit for tax paid to another state, marketplace facilitator flags, origin-based sourcing (enter the company's own jurisdiction for such sales), Texas's 2% local cap and partial taxability (e.g. 80% of Texas data processing), address-to-jurisdiction lookup, state return forms and e-filing, 52-53-week years, payroll and income tax.

Where it is in the app¶

Go To (Alt+G), section "Sales tax", US companies only: Sales tax by jurisdiction (US), Form 1099 vendors (US), Use tax on untaxed purchases (US) (Ctrl+Alt+J sets where the goods are used) and Exemption certificates (US) (Ctrl+Alt+A adds a certificate with addCertificate, Ctrl+Alt+D removes one).
The duty-ledger "Type of tax" list offers STATE, COUNTY, CITY and DISTRICT for US companies.
tax.rs invoice_tax calls tax_us::exempting_certificate for a US sale: when the customer holds a valid certificate for the state, no tax is charged and the invoice shows "no sales tax: the customer's exemption certificate … covers …", so the invoice and the report agree.

United States pack (khata-us): sales tax, use tax, certificates and Form 1099¶