Sales Tax
Sales tax collected and owed, by jurisdiction.
The sales tax report shows tax you've charged, by jurisdiction and period, with the figures a return needs.
Sales tax isn't your money. You collect it for the government and hold it until you remit it, so it's a liability from the moment you charge it.
From charge to filing
- Set rates on what you sell
Tax rates attach to products and services and carry onto invoices.
- Charge it on invoices
Tax is set per line. The invoice credits sales tax payable, a liability, not revenue.
- Run the report for your period
Tax is grouped by jurisdiction, the way returns are filed. The summary shows sales and tax on both accrual and cash, and checks the total against Sales Tax Payable.
- Remit and record
Paying the authority debits the liability and credits cash. It isn't an expense; you're handing over money you held.
Why collected tax isn't revenue
A $1,000 invoice with $80 tax collects $1,080, but revenue is $1,000. The $80 is a liability until remitted. Booking the full $1,080 as revenue overstates income and hides what you owe, often until the money has been spent.
What this report doesn't do
It reports what you charged at the rates you set. It doesn't decide where you must collect tax (nexus), and it doesn't file returns. Nexus depends on where you operate, where your customers are, and thresholds that change. Ask a tax professional.
Good to know
- A growing Sales Tax Payable balance means a filing is coming due, not that sales are up.
- Lejr doesn't file returns or register you anywhere.
- Export downloads the report as PDF, Excel or CSV.