NESFA Treasury Procedures: Mass Sales Tax

NESFA collects Mass. Sales Tax on all book sales to addresses in Mass. or where the transaction  takes place in Massachusetts. The rate is 5%. It is collected on books, but not on memberships, dues, or t-shirts.

NESFA is required to track taxable sales and we do this by being meticulous in charging and recording tax on all taxable sales. By doing this carefully and accurately, we can compute total taxable sales by multiplying the sales tax collected by 20.

When sales tax is collected, it is put into the LI-MA Sales Tax account. (If a sale is taxable and no tax was collected due to error, NESFA eats it.  Compute the tax that should have been collected and put it in the LI-MA Sales Tax account, and balance that with a SE-Misc expense.)

A sales tax return must be done monthly by the 20th day of the following month. (The January sales tax return must be filed by Feb 20th.) To fill out the sales tax return:

1. Set the current month to the month in question.
2. Run and print the report "Reports/Financial Statements/Sales income for current month" to get total sales.
3. Run and print the report "Reports/General Ledger/This Period's sales tax" to get sales tax collected
4. Compute total taxable sales by multiplying the month's sales tax collected by 20
5. Fill out the little form, write a check, xerox it all, attach the two reports you printed, save the copies and mail the form and check.