Surcharge Sales Tax Setup Guide

In most states, a credit card surcharge is taxable when the service it is added to is taxable. QuickBooks: Surcharge Sales Tax feature books the sales tax you owe on surcharges into QuickBooks automatically, so it shows up on your sales tax return.

How it works

Paystri keeps the surcharge it adds to a card payment, so you never collect sales tax on it. You still owe that tax. For every surcharged card payment you take in MaidCentral, we create a $0.00 sales receipt in QuickBooks for the same customer, dated the day of the payment. QuickBooks calculates the tax for that customer's address, and the receipt records it as tax you owe and as an expense you absorb.

Your invoices, payments, and deposits don't change. QuickBooks keeps matching what Paystri reports and deposits.

Example:

A $200.00 cleaning paid by credit card with a 3% surcharge ($6.00), for a customer whose sales tax rate is 7%. The $0.42 goes onto your sales tax liability for that customer's jurisdiction and onto your profit and loss as an expense. Your revenue doesn't change.

Sales receipt SCT48213

Customer: Jane Smith · Deposit to: Surcharge Clearing

Before you start

• Your company is connected to QuickBooks Online, and Automated Sales Tax is turned on in QuickBooks.

• You're signed in to MaidCentral as an Administrator.

• You've checked with your accountant that surcharges are taxable in your state. Most states tax them when the underlying service is taxable. Colorado does not tax a surcharge that is shown separately.

Set it up

1. Create three things in QuickBooks

You can reuse existing ones if they fit.

A surcharge item

A Service item for your credit card surcharge income, for example, "Credit Card Surcharge".

A sales tax expense item

A non-taxable Service item whose income account is set to an expense account, for example, an item "Sales Tax Paid" pointing at a "Sales Tax Expense" account.

A clearing account

A Bank-type account, for example, "Surcharge Tax Clearing". The $0.00 receipts are deposited here, so the balance always stays at $0.00.

2. Turn on the feature

In MaidCentral, go to Company > Settings > General and open the Features tab. Find QuickBooks: Surcharge Sales Tax and switch it on. It saves right away, and you'll see "Feature enabled". Then reload the page so the new QuickBooks options appear.

3. Choose your three QuickBooks mappings

On the same page, open the Integrations tab and scroll to the QuickBooks section. Pick each item and account from step 1, and click the blue save button beside each one:

• Surcharge Item

• Sales Tax Expense Item

• Surcharge Clearing Account

4. Start booking

Check Book Surcharge Sales Tax and save. The page then shows the date booking started. Every surcharged card payment from that moment on is booked automatically.

Choose the mappings before you check the box. If a mapping is missing, booking pauses, and the page says so. Payments taken in the meantime are booked once all three are set.

Day to day

What is not booked

• Payments from before the start date

• Voided, declined, or fully refunded payments

• Invoices with no sales tax, such as tax-exempt customers or non-taxable services

• Payments with no surcharge, such as debit cards

Payments from before you turned the feature on

Go to Company > Invoicing and Payroll > All Invoicing and Payroll Reports > Payment Reconciliation and click Surcharge Tax Backfill. Pick a date range to see every surcharged payment in it, whether a receipt exists, and totals for what is booked and what is outstanding. Click Create on a row to book that payment. The receipt is dated on the original payment date, and a payment can never be booked twice.

Check with your accountant first

Backdated receipts land in past months. If a month is already closed in QuickBooks, or its sales tax return is filed, your accountant may prefer a single adjusting entry instead.

Turning it off

Uncheck Book Surcharge Sales Tax and save. Receipts already in QuickBooks stay there. If you turn it back on later, the original start date is kept, and any payments taken while it was off are booked.

QuickBooks: Surcharge Sales Tax - Collect from Customer

This feature adds a taxable surcharge line to the invoice when collecting sales tax on a credit card surcharge from the customer. With this on, QuickBooks invoice and payment totals no longer tie to Paystri reporting and funding since Paystri keeps the surcharge and excludes it from both.

This feature requires reviewing with your accountant prior to enabling and having the QuickBooks: Surcharge Sales Tax feature turned on. If you would like this to be enabled, please contact our support team to submit a request!