Sales Tax Pro from PASH LLC

Overview:

Most professionals who work with QuickBooks clients know first-hand that every setup as it relates to sales tax seems to be different. Some use sales tax items, others use sales tax groups, and sales tax codes (added to QuickBooks in 2002) add yet another dimension to tracking sales tax. With all these alternatives, it would appear that automating the process of preparing sales tax returns would be next to impossible.

However, PASH LLC, the developer of Sales Tax Pro, has done a fantastic job of automating the California sales tax return preparation from QuickBooks data. They’ve done an amazing job making it easy to use and gone one step further with great written and video documentation. Most importantly, the software provides consistent and accurate results for each tax return using the appropriate rates. These rates are based on the transaction dates, no matter what has been charged in QuickBooks.

Prior to Sales Tax Pro, several reports, manual calculations, and re-keying of information was required to prepare the California BOE-401-A2, Deductions/Exemptions, and Schedule A. However, with Sales Tax Pro, all you have to do is a one-time setup that “teaches” the program about your QuickBooks data, and it does the rest for you. It prepares the return and the supporting schedules for you to print on blank paper. You can even set preferences for the program to give warnings when something looks questionable that would affect the accuracy of the tax return.

Set Up:

Sales Tax Pro can be downloaded from http://salestax-pro.com/products.html for use with QuickBooks Pro and Premier versions 2005 and 2006 and Enterprise Solutions version 5 and 6, including all industry specific versions. Microsoft Windows NT, 2000 or XP plus Java 1.4.2 or higher are required.

The installation process is quick and easy. A detailed QuickStart Guide is available with screen shots to provide step-by-step instructions at http://salestax-pro.com/QuickStartGuide.pdf.

By default the data is stored on the local computer; however you can also save the data on a networked drive.

Use:

Once the software is installed, open QuickBooks and the data file that will be used to create the return. This will begin the 3 step process:

1. Import the data from QuickBooks
2. Map the items and sales tax codes to the correct boxes on the return (only needed the first time unless there are changes)
3. Prepare the return.

Import the Data

Sales Tax Pro imports the data from the QuickBooks data file, and very importantly, it never writes any information back to the QuickBooks data file. Included in this import are all sales transactions (sales receipts, invoices, credit memos, and statement charges), company address information, and sales tax payment information.

Map the Data

Sales Tax Pro allows you to map the QuickBooks data to the appropriate place on the tax return. For example, you can map sales transactions to the following sections of the return:

• Schedule A – Depending on how the sales tax items or sales tax groups have been set up, you can create a mapping to a specific line based on the Tax Area. For example, if a client has set up Contra Costa County and a separate item for Walnut Creek, they can both be mapped to the Contra Costa County line on the return. For those items that are either non-taxable or do not relate to a specific Tax Area on Schedule A, N/A is available.
• Deductions/Exemptions Schedule – For this schedule it is possible to map the item, the sales tax item, or the sales tax code to the “reason” for the deduction. For example, if the QuickBooks data uses an “out-of-state” sales tax item, it can be mapped to the appropriate line on the tax return for all sales regardless of the sales tax code that was used. If the QuickBooks data has non-taxable sales to taxable counties, the sales can be mapped at the item level. For example, if a sale includes a taxable piece of machinery and also a non-taxable labor item, the labor item can be mapped to the appropriate line on the deductions/exemptions schedule for only the sales of that item designated with a non-taxable sales tax code.

Prepare the Return

With a click of a button, the imported data is translated into the correct boxes on the return including the sales tax payments. If there are purchases subject to use tax, those can be entered and the return will be updated accordingly. The return is created within the application and looks almost just like the actual form. The exception to the look is that the format displayed on the screen contains icons at appropriate locations on the return; one on the left which will display the calculation details for that given line item and one to the right that will allow you to override the calculated value. The return is printed in Adobe Acrobat (pdf) format. Reports can be printed or saved as a PDF or exported to Excel.

Summary:

We put Sales Tax Pro to the test with this real life example: A client sells equipment; some of the equipment is sold directly to the end user (i.e. subject to sales tax) but other is financed (i.e. sold to a lender for resale). When the invoices for the lenders are created, the sales tax code for the specific item being sold is often left as taxable rather than being changed to non-taxable. Although the sales tax liability report shows the correct sales tax due (because the customer was assigned a default sales tax item of resale) the distribution of the sales includes a taxable and non-taxable component. With Sales Tax Pro, the mapping of the resale sales tax item to the resale line on the back of the return solves this issue by including all sales to that item regardless of the sales tax code used. The manual preparation of the return in the past took about ½ hour each time. The mapping for this and all other issues took about ½ hour. Once the mapping was done, the return took about 5 minutes to prepare, and what’s really neat is that the settings will be remembered next quarter. This means we can just go straight to preparing the return without worrying about the mapping of sales tax settings. Despite our significant reservations at the beginning, we are quite happy with both the ease of use and the accuracy of the returns.

Pricing:

There is no cost for the product for an unlimited number of returns through 7/31/06. After that the cost will be $9.95 per printed return.