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Calculate Consumer Use Tax

AvaTax for QuickBooks Desktop can calculate consumer use taxHoverTT.png for vendor bills. Calculate and verify the use tax if the vendor hasn’t charged it, accrue the use tax, and save the transaction to AvaTax for consumer use reporting.

Configure consumer use tax

Before you start calculating consumer use tax in AvaTax for QuickBooks Desktop for registered vendors, enable the following use tax options:

  1. In QuickBooks Desktop, go to AvaTax Configuration > Tax Calculation > Consumer Use Tax Assessment Settings.
  2. Select Enable Use Tax Assessment On Vendor Bill. 
  3. In the Use Tax Payable Liability Account, select the account to which the accrual amount is to be credited.
  4. In the Use Tax Debit GL Account, select the account from which the accrual amount is to be debited.
  5. In the Vendor Paid Tax Line Item, select the line item for which the vendor use tax is to be configured. Create a return invoice, select this line item, and enter the amount. This amount is considered as the Vendor Charged Tax. In the return invoice, if this line item isn't added, then the vendor charged tax is considered 0.
  6. To select vendors for whom you want to calculate consumer use tax, click Vendor Tax Accrue Update Utility and select your vendors.
  7. Click OK.
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Calculate consumer use tax

In QuickBooks Desktop, calculate consumer use tax for vendor bills using one of the following methods:

  • Create a purchase order and then create a bill; or
  • Create a bill.
  1. In QuickBooks Desktop, click Enter Bills.
  2. To create the bill, select Bill and create a new bill. To open an existing bill, type the Ref. No. of the purchase order.
  3. Enter the bill details.
  4. The consumer use tax is calculated when you save the bill. Click Save & Close to close the bill or click Save & New to close this bill and create a new one.
  5. Messages are displayed based on the accrue amount suggested.
    • The amount of tax charged to the vendor/seller is correct, i.e., the accrue amount is 0.
    • The amount of tax charged to the vendor/seller is greater than the amount charged by AvaTax, i.e, the accrue amount is overcharged.
    • The amount of tax charged to the vendor/seller is less than the amount charged by AvaTax, i.e, the accrue amount is undercharged. 
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      • If you don't want to accrue the self-assessed consumer use tax, click No.
      • If you want to accrue the self-assessed consumer use tax, click Yes. After you click Yes, the consumer use tax is calculated for this transaction and is posted to the Admin Console and the associated GL accounts.
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