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I've read the Mn Dept of Revenue FAQs and attended their class. As a contractor (sole proprietor) in MN I am required to pay sales tax when I buy materials and include the sales tax in the total price on the invoice for the materials when I install them. OK, that was easy enough. But I have to charge the sales tax for the location they are installed in, not the sales tax I paid at the location they were purchased. OK, that is a little confusing, but I think I can deal with that. But if I buy a lot of materials in bulk and keep a sizeable inventory in stock and install only small fractions of a single purchase from one location into real locations in a variety of tax locations then things get interesting. Especially if I buy many different boxes, say 20 pounds each of screws, each box a different size or type. And computer network cables in bulk. Different types (riser, plenum, cat 5e, cat 6, coax, etc.). And in each project I use a variety of materials, but never a full box of screws nor a full reel of cable.

How do I get QuickBooks to track my inventory properly? I need to track what tax location purchased (Minneapolis AND Hennepin County or just Hennepin County, etc.) and how many screws were purchased in each of those boxes. Then I need to track how many screws from what tax location(s) were installed in what tax location(s). I don't think that MN DOR will mind if I use a first-in-first-out inventory accounting method as long as sizes and types match. Thank you very much!