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We need your input!  We’re trying to determine whether the format of the downloadable QuickBooks file with the IIF extension should be changed. 

Currently, when a tax rate changes for a location code a new sales tax item is added.  A history of tax rate changes remains in the file from previous uploads as shown below (click on image to enlarge):

image

 

Some of the current format advantages and disadvantages are:

Advantages:

  • The IIF file can be uploaded into QuickBooks before the effective date each quarter.
  • Sales to each location can be tracked individually in the sales tax liability report.
    • Very important to those who file an annual return and rate changes occurred during the calendar year.  The sales tax liability report will display the correct rate for each sales tax item.
  • When issuing credit memos, the older sales tax rates will be available when the rates have changed between the time the sales were made and the time the credit memos (or refunds) are made.

Disadvantages:

  • Customer profiles with a default sales tax item need to be updated each time a sales tax rate changes.  The business needs to update the customer profile each quarter or verify the correct sales tax item with each invoice, credit memo or sales receipt as it’s created.  This is done each quarter, if your business makes recurring retail sales to the same customers.
  • The number of items in the sales tax item list will continue to grow over time.  There will be a separate sales tax item for each rate for each location code.

 

The proposed change would keep the same name in the IIF file for each quarter, but the description and tax rate would change as shown in the example below (click on image to enlarge).

image

Some of the advantages and disadvantages with the proposed change are:

Advantages:

  • The customer profile does not have to be updated each quarter for those businesses that have recurring retail sales to their customers.
  • The number of sales tax items is kept to a minimum as there would be only one sales tax item for each location code.

Disadvantages:

  • The IIF file cannot be uploaded into QuickBooks before the effective date of each quarter.  It can be downloaded but not installed before the effective date.
  • Filers who use the Sales Tax Liability report to report their retail sales may have trouble with the lack of detail.  The Sales tax liability report summarizes each item by taxable and non taxable sales tax codes and displays the current rate of each item. 
  • Annual reporters using the sales tax liability report for the calendar year will find one location code and the current tax rate displayed although there may have been many rate changes throughout the year for a particular location code.
  • If credit memos are issued and the sales tax rate has changed since the sale was made, a new sales tax item will need to be created to reflect the old rate so the correct tax is credited to the customer.
  • The business must link the existing customers to the newly named sales tax item the first time this new format is used.

 

Take our quick survey about the proposed QuickBooks change