The Sales Tax Liability Report in QuickBooks Online

The Sales Tax Liability Report summarizes, over the period you choose, the sales tax you charged and the sales behind it. For each tax agency you collect for, it separates your gross sales into taxable and nontaxable amounts and shows the tax charged on them, so you can see what you owe each jurisdiction and tie it back to the returns you file. Where the Sales Tax Center tracks what is due and what you have paid, this report shows the sales activity that produced those figures.

What the Sales Tax Liability Report shows

For each tax agency, the report lays out four figures: the gross total of sales, the nontaxable amount, the taxable amount, and the tax amount for the period. Within each agency it breaks those down further by tax rate or tax code, so a business collecting for a state plus local districts sees each one on its own line, with a total at the bottom. Read across a row, you can see how much of your sales were taxable and how much tax that produced for a given jurisdiction.

It is a period report driven by the sales and sales tax you recorded during the date range you set. The totals depend on that range, and if your QuickBooks company shows an accounting-method option on this report, export the version that matches the records you are trying to support and ask your CPA if you are unsure which one applies.

Why a CPA or auditor asks for it

Sales tax is administered by state and sometimes local tax authorities, and a state sales-tax audit looks at exactly what this report holds: how much you sold, how much of it was taxable, and how much tax you collected and remitted, by jurisdiction. It is the bridge between your books and the sales tax returns you filed. A CPA or an examiner uses it to reconcile filed returns against recorded sales, to check that nontaxable sales are properly supported, and to spot periods where the tax collected does not line up with what was remitted. It sits close to two other records an auditor tends to open: the gross sales here relate to the sales income on your Profit and Loss, and the figures trace back to the underlying sales transactions, which you can also follow into your General Ledger. Our guide to the records an examiner asks a small business for covers how these fit together.

How to run and export the Sales Tax Liability Report in QuickBooks Online

1. Go to the Reports menu and type "Sales Tax Liability Report" into the report search box, then open it.
2. Set the report period. Match it to a filing period, a full fiscal year, or choose All Dates for a complete history.
3. Use the Tax Agency dropdown to show all agencies or a single one, then run the report.
4. Use the export control at the top of the report to export it to Excel or PDF. The file downloads to your computer.
5. Repeat for each filing period or year you need, since the totals depend on the date range you set.

Capture each period you filed, so you keep the support behind each return rather than a single running total.

Keeping the Sales Tax Liability Report after you cancel

You can include the Sales Tax Liability Report in your Books Backup archive on request, and you can also export it yourself before you cancel. It is worth saving, because a cancelled paid QuickBooks Online company goes read-only for 12 months and is then permanently deleted, a trial only 90 days, and the IRS generally expects business records to be kept for at least three years, and longer in some cases. Sales tax records often need to be kept for the period your state can audit, which can differ from the federal window, so check your CPA or your state's guidance. Once the company is deleted, the taxable-versus-nontaxable breakdown and the transactions behind it are gone.

Frequently asked questions

Does the Sales Tax Liability Report show what I still owe?

It shows the tax amount for sales during the period, grouped by agency. What is actually due after payments and adjustments is tracked in the Sales Tax Center, so run both and take any filing question to your CPA or your state's guidance.

How does it break the numbers down by jurisdiction?

By tax agency, and within each agency by the tax rate or tax code. A business that collects for a state plus one or more local districts sees each one on its own line, which is what a sales-tax auditor works from.

Why keep it if I already filed my sales tax returns?

A filed return is a summary; this report is the support behind it. If a state questions a period after you have cancelled QuickBooks, the taxable-versus-nontaxable breakdown and the underlying transactions are gone once the company is deleted. Keeping the report for each period you filed, ideally alongside the General Ledger, leaves you able to answer.