{"id":1001162,"date":"2018-05-18T14:26:01","date_gmt":"2018-05-18T18:26:01","guid":{"rendered":"http:\/\/blog.bmcgiverncpa.com\/?p=1001162"},"modified":"2020-01-22T04:09:20","modified_gmt":"2020-01-22T04:09:20","slug":"setting-up-sales-tax-in-quickbooks-online","status":"publish","type":"post","link":"https:\/\/www.bmcgiverncpa.com\/blog\/index.php\/2018\/05\/18\/setting-up-sales-tax-in-quickbooks-online\/","title":{"rendered":"Setting Up Sales Tax in QuickBooks Online"},"content":{"rendered":"

Sales tax is one of the more complicated concepts supported by QuickBooks Online.<\/em><\/p>\n

QuickBooks Online was designed for you<\/em>, the small businessperson. You\u2019ve probably discovered that many of its features are fairly easy to use from the start.<\/p>\n

But just because QuickBooks Online can <\/em>do something doesn\u2019t mean you should attempt it on your own. Sales tax is one of those things. Depending on your geographical location, you may have to charge not only state sales tax, but also county and city\/municipality taxes (and sometimes special taxes). If you\u2019re selling products or services to customers in other states, your situation can get very complicated.<\/p>\n

We\u2019ll show you some of the mechanics involved, but we strongly recommend that you let us help you with this.<\/p>\n

Setting Up Sales Tax<\/strong><\/p>\n

We\u2019ll describe the process of setting up sales tax rates so you can see how it will work. Click the Taxes <\/strong>link in the toolbar. The new screen should open to the Sales Tax Center<\/strong>; if it doesn\u2019t, click its link in the toolbar above. In the right vertical pane, under Related Tasks<\/strong>, click Add\/edit tax rates and agencies<\/strong>. Then click New <\/strong>to open this window:<\/p>\n

\"Sales<\/p>\n

You can define either a Single tax rate <\/strong>or Combined tax rate <\/strong>in this window. <\/em><\/p>\n

You\u2019d enter the Tax name<\/strong>, Agency name<\/strong>, and Rate <\/strong>in the designated fields if you\u2019re just creating a Single tax rate<\/strong>. In some cases, you may have to enter a Combined tax rate<\/strong>. If so, click the button in front of that label. The window that opens contains fields that are similar to the ones in the above image, except that Tax name <\/strong>is replaced by Component name<\/strong>. You\u2019ll choose this option when you have to record individual elements of the tax separately. For example, Ft. Myers | Lee County| Florida State<\/strong>.<\/p>\n

To muddy things up even more, some items in some situations are exempt from sales tax.<\/p>\n

Questions about the Combined tax rate<\/strong>? Contact us.<\/em><\/p>\n

When you\u2019re done, click Save<\/strong>. You\u2019ll see the tax you just created in a table in the window that opens. To define a New<\/strong> tax, Edit <\/strong>an existing one, or Deactivate <\/strong>one in the list, click the appropriate button. If you\u2019ve entered all you\u2019ll need for now, click Return to Sales Tax Owed and Recent Payments<\/strong>.<\/p>\n

Your Responsibilities<\/strong><\/p>\n

Once you\u2019ve set up all the sales tax rates required for you, QuickBooks Online will calculate them for you in transactions where they need to be collected. You can see the running tally in the Sales Tax Center<\/strong>, but it\u2019s up to you to create and record payments on the prescribed schedule. You can also run related reports here.<\/p>\n

The site bases its calculations on three things:<\/p>\n