One of the helpful tools in QuickBooks works to keep you updated on sales tax rates where you do business, even though they change all of the time.
You Get the latest rates to ensure accurate tax calculations and streamline your bookkeeping responsibilities. Don't let tax rate changes disrupt your workflow. Implement these updates with ease in QuickBooks.
Colorado tax content changes
Colorado - E911 Fee
Effective January 1, 2024, the Colorado prepaid wireless charge on retail sales of prepaid wireless telecommunication services will be adjusted to $1.88 for the 911 charge and $0.14 for the 988 charge, for a total of $2.02. The following tax category has been updated:
Prepaid phone card and cellphone service fees where the seller doesn’t provide the telecommunication services include E911 and 988 fees.
Colorado - Loveland
In addition to the Colorado rate changes posted by the Colorado Department of Revenue and noted above, Loveland, CO, announced it will eliminate its sales tax on food for home consumption starting January 1, 2024. As a result, the food-related tax category codes have been updated in QuickBooks to account for this local food rate change. For more information, see Loveland’s announcement posted here.
You can find detailed sales tax rate changes for the states and jurisdictions by following the links listed in the table below.
January 1, 2024 tax rate updates around the US
Louisiana (Parishes of DeSoto, East Feliciana, Iberia, Jefferson Davis, Richland, Tensas, Vermilion)
You can use the QuickBooks free sales tax calculator anytime to find rates for any US address.
Understanding Sales Taxes in QuickBooks
Sales tax is a state or local tax paid to sell goods and services. Often referred to as retail, excise, or privilege taxes, these are collected by a seller from the buyer and remitted to the appropriate tax authority within a specified period.
Sales tax revenue funds various public services such as education improvement, infrastructure development (roads, parks, government-owned buildings), and hiring public safety personnel.
Necessities for Calculating Sales Tax
QuickBooks simplifies the process of calculating sales tax. For accurate data, have your complete business address, including the street and ZIP code.
Sales Tax: Who Pays and Who Remits?
Although the consumer pays the sales tax, as a business owner, you collect this additional cost and remit it to the tax authority regularly. Your business must remit sales tax in any jurisdiction with a tax 'nexus.'
Sales Tax Nexus: What Does It Mean?
A tax 'nexus' refers to a business's significant presence in a tax jurisdiction. If your company has a nexus in a particular state or area, you must remit sales tax to the proper authorities in that jurisdiction.
Sales Tax FAQs
Here are some common FAQs to guide you:
Do I have to collect sales tax?
Yes, in states imposing sales tax, you must collect and pay it. Failure to comply can result in interest, penalties, and even asset seizure or liens on your property.
What is my sales tax rate?
The sales tax rate differs based on your business location. Use our calculator above and input your ZIP code to determine your rate.
Do sales taxes vary between states?
Indeed, sales tax rates differ across states and are often influenced by the per capita income of its residents. For example, Hawaii has a tax rate of 4.44%, while Tennessee's rate can be as high as 9.55%. Some states, including Alaska, Delaware, Montana, New Hampshire, and Oregon, do not impose a sales tax.
Are any goods or services exempt from sales taxes?
Generally, groceries are exempt from sales tax. Depending on the state, some businesses might also be exempt when purchasing goods or services for business operations. Furthermore, most services are not taxed unless they fall under some specific exceptions.
What is use tax?
Use tax is levied on goods or services purchased outside one's home state or on which no sales tax was paid. This tax is paid directly to the tax authority, often through state income tax returns. The use tax rate usually mirrors the sales tax rate based on the purchased item's consumption or "use" location.