How to Setup a Sales Tax Liability Account

In GnuCash, the Sales Tax Liability account is used to track the sales tax you collect from customers. This account is typically categorized under liabilities because the collected sales tax is not your income—it is money you owe to the government. When you create invoices or record sales transactions, the sales tax amount is posted to this account. Later, when you remit the tax to the authorities, the payment is deducted from this account.