Sales tax: set it up, charge it, and see what you owe

Sales tax in BooksGPT is two screens: one to set the rate up, one to see what you owe.

1. Add your rate

1. Open All pages in the left sidebar, then under Setup click Sales taxes.
2. Click Add tax.
3. Fill in Name, Abbreviation, and Rate (%), for example State Sales Tax, ST, 8.25.
4. Add your Tax number if you have a registration number to show customers.
5. Click Create.

Add one rate per jurisdiction you collect for. They are reported separately.

2. Charge it on an invoice

On an invoice or estimate, each line has a Tax column. It starts on No tax.

• Pick your rate on the lines that are taxable, and leave the rest.
• Tax is a straight percentage of that line, and it is shown as its own Tax total.

Recoverable and Compound tax are recorded against the rate for your own reference. They do not change how the tax on an invoice is worked out.

3. See what you owe

Open All pages, then under Reports click Sales tax report. Set your filing period and click Apply.

• Taxable is the revenue that carried that rate.
• Collected is the tax on top, which is what you remit.
• Export CSV gives you the figures to type into your state filing.

How it adds up

• The report counts sales tax on invoices you have issued. Drafts and voided invoices are left out.
• It counts by issue date, not by the date the customer paid.
• In your books, tax you collect is credited to Sales Tax Payable. It is money you are holding for the state, not revenue, so it never appears as income.
• Your workspace needs a Sales Tax Payable account before a taxed invoice can be sent. The standard chart of accounts already has one.

What BooksGPT does not do

• It does not look up your rate for you. You enter the rate you are registered to collect.
• It does not track what you have already remitted. Record each payment to your state as a normal expense against Sales Tax Payable.
• It does not file or pay for you.

Updated on: 03/08/2026