US sales tax
Sales tax invoicing and accounting for the US
Pick the United States when you set up and Kanakku configures sales tax for you: US dollars, a January financial year, and rates matched to the state your customer is in.
What you get when you pick United States
CurrencyUS dollar (USD)
Financial yearJanuary to December
TaxSales tax
RatesRates from a library, matched on the customer's state
Your chart of accounts, tax accounts and default tax rates are created for you at the same time, so you can start invoicing straight away.
How the tax is worked out
- The rate is matched on the customer's state, and can be made up of several components.
- No rate is pre-filled, because US sales tax depends on where you sell. You choose the rates that apply to you.
- Sales tax you pay on purchases is booked as a cost, as US sales tax works, rather than as a tax you reclaim.
Reports from your books
- Tax summary
- Profit and loss, balance sheet and trial balance
Figures come from the tax accounts in your ledger, so they reconcile to your trial balance.
Good to know
- Your country, currency, tax regime and financial-year start are fixed once you record your first transaction, so choose them carefully during setup.
- Kanakku prepares the figures for your return. Check your filing obligations and rates with your accountant; this page is not tax advice.
Frequently asked questions
Does Kanakku choose the sales tax rate for me?
It matches rates from its library on your customer's state. Because sales tax depends on where you have a presence and what you sell, you should confirm the rates that apply to you with your accountant.
How is tax on purchases treated?
Sales tax you pay on purchases is booked as an expense, not a recoverable asset, which is how US sales tax works.
Set up US sales tax in a minute
Start on the Free plan, choose United States, and Kanakku configures the rest.