How Do I Bill Sales Tax on an Operating Lease?
- 1). Calculate the amount of sales tax on an operating lease. Leases receive a set amount of money per period, so this amount will include the sales tax. For example, a state charges 6 percent sales tax on operating leases. A company collects $5,000 a month on the lease. Therefore, multiplying $5,000 times 0.06 equals $300 in sales tax.
- 2). Create the journal entry for the lease. In the example, debit "Cash" for $5,000 and credit "Operating Lease Revenue" for $5,000.
- 3). Record the tax journal entry. In the example, debit "Operating Lease Tax Expense" and credit "Sales Tax Payable."
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