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In these sales situations, an item is sold on a website at a fraction of it’s real value, e.g. a $100 item sold for $50. The merchant receives only $25 from the website and the customer must pay the tax on the $50.
To make things easier for you, create a new item in your Product File.
Tip: you can change the generated product Item Number - so pick something easy to remember such as, Groupon, Disc-A01, or Disc-G, etc.
Enter a useful Description.
For example, Groupon Discount $20, or Groupon valid until 9/30/13.
Mark the box(es) for Tax Exemption if the customer is required to pay tax on the price before discount.
Select or create the Category as Discount.
Next, in the large Pricing tab, locate the Item field (it is under the RETAIL label) and enter the dollar amount as a negative (if it is a fixed amount) or leave it blank if it is a percentage discount.
Enter the Item
sold to the customer from the Groupon website.
You can enter the full value ($100)
and enter the discount percentage (.50) to calculate the taxable amount.
Or, you can enter just the taxable value ($50).
In the second line, enter the Groupon item you created and put
into the Discount category,
e.g. Groupon, Disc-A01, or Disc-G.
All the fields auto-fill (except
for the Amount if you left it blank).
Enter the dollar amount you will not receive or your loss portion
as a negative (-$25).
This amount will be deducted, but,
because it is non-taxable, the amount for which the tax is calculated
will remain as a balance to be paid.
Enter a payment for the amount you will receive from the web company ($25).
Then enter the payment
you receive from the customer for the amount of the taxes ($2.50).
This will mark your invoice as
Paid in Full.