@qbteachmt - Thank you for the additional detail and link to QB Community. I am working off a bank statement and the client made a sales tax liability payment.

I realize QBO takes care of the sales tax, but as you mentioned, I am trying to categorize the payment correctly. Based on your last paragraph, it sounds like because of the limited data I have to work with, I must categorize the sales tax payment as an expense.

That makes sense to me because I have no previous data to confirm the accuracy of the liability.

However, as soon as the accounting is current, then I can properly track sales tax liability and the payment using QB sales tax tool and trust the data is correct.