 We're looking at the sales tax now paying off the sales tax. Let's just give a quick recap of the sales tax. So if I scroll down here we've got this liability account which is in our case California Department of Tax because that's the department. They set up the sales tax kind of by department which is unusual. Usually you don't make an account by who you're paying like the vendor in essence. But it kind of makes sense if you have multiple sales tax to kind of help you to distinguish between the people that you have to pay if you have to pay different departments. But basically it's sales tax payable. So note that in the United States we have sales tax as a state tax. So there's kind of three things you want to keep in mind that we set up in a prior presentation to get the sales tax up and running. One, set up the sales tax in QuickBooks. Two, set up your items so that when you make the sales using those invoices and sales receipts it will calculate the sales tax. And then three, you've got the customers that you want to be able to set up to see if there's any kind of overriding factor for a customer that might be not subject to sales tax. Quick recap on that. Go into the tab to the left. We went down to the taxes to set up our sales tax. We've got our tabs up top. There's our sales tax that has been set up. We basically made California our sales tax item because we based our practice problem on a location in Beverly Hills. But we also made like a generic sales tax of 5% here for the generic problem purposes. Once sales tax had been set up and we have a location that it can be used to apply the sales tax, we then set up our items which are the things that we sell. And those are going to be in the sales tab on the left. And then the products and the services. I said that like I didn't know, like I wasn't unsure, but I'm told, but I am sure that's where they are for sure. And the sample company, they're in the get paid and paid area and then product and services in the get paid section. And then we went in here and we set up our items, the inventory items for us are going to be the ones that are subject to the tax. And then the non inventory or service items, we said we're not subject to tax. If I was to edit one of these, for example, you could see the tax being applied down here and you could see it checked off right there as a taxable item. And then we went or we could consider going to the customers themselves. And we could say, okay, customers are in the sales tab and then customers. And if we had a customer which would have been subject to sales tax, but is not then subject to sales tax for whatever reason, as you set up the customers, you can kind of set up that overriding kind of component. So if I go into Anderson, for example, and edit, and then we scroll down to the sales tax stuff, which is down here, taxes, we could say this customer's tax exempt. If they were tax exempt, that would mean that even though the inventory item is the main driving factor to say whether or not sales tax is applied, we can call them exempt. And we can also change the location of the sales tax here so that the proper location will be applied to the proper customer. Okay, so that's the general idea. Now, as we set up the sales tax, the next question is, well, how are we going to pay the sales tax? How is this going to work? Because when we make an invoice, the tax is basically applied. And we're charging the customer for the taxes, but we have to pay the tax to the to the government. So let's actually look at an invoice. I'm going to open up an invoice. Let's see, let's look at the sales receipt here. Check that one out. Did we sell in this one sold? We sold inventory on this one. So it's subject to the taxes. So just with regards to the tax side of things, what happened here? Well, we charged $9,000, our $2,094 total. And then we had to tack on the sales tax, which we said was a generic 5% bringing the total up that we're going to charge the customer $2,198.70. Now with the sales tax, remember that that's not going to be included this $104.70 in income. Income is only going to be the $2,094. We're going to collect $2,198, which is going to increase the checking account or the payments to deposit in this case. The difference is going to go to a payable account. And the idea there is you can imagine a situation where it increases like the sales account. Like I could, you can imagine the situation where we charge this $2,198 and we charge it to a sales account. And then when I pay the sales tax, I record an expense, which will net out on the income statement. But we don't do that in theory because we want to say, no, we're not charging you this amount. We're just the tax collector. It's not hitting the income statement. We're just the tax collector. So we collected $104 because the government's charging you the taxes customer. And we are just collecting it. And then we have to pay to the government. So neither the income nor the expense is going to hit the income statement. And then logistically, we have to say, okay, well, how, how am I going to pay the government? How often do I have to pay them? Do I have to pay them every time I make a sale and then pay the government on each, on each transaction, that would be burdensome. So normally it'll be dependent on your locale in terms of how often you have to pay them. So, and so, and it's going to be dependent on your location, but the general idea would be, I'm going to collect sales tax for some period of time. If it was monthly, then for the month of January, for example, which is going to be our practice problem, I'm going to collect sales tax through the month of January. And maybe I have till the end of February in order to pay the sales tax I collected in January.