5 Things You Need to Know About Sales Taxes in QuickBooks Online
The most important thing you need to know about sales tax is that administering it correctly can be challenging.
QuickBooks Online calculates sales tax rates based on:
- Where you sell. Every state is different. If your business is located in Florida and you sell to a customer in Minnesota, you’ll be charging any sales tax levied by the state of Minnesota and possibly the city and county and other taxing authorities – if you have a connection, a “nexus” in that state (a physical location, active salesperson, etc.).
- What you sell.
- To whom you sell. Some customers (like nonprofit organizations) do not have to pay sales tax. You’ll need to edit their customer records to reflect this in QBO. Open a customer record and click the Edit link in the upper right. Click the Tax info tab and make sure there’s no checkmark in the box that says This customer is taxable. The Default tax code will be grayed out, and you can enter Exemption details in that field.
Intuit now offers a revamped version of QuickBooks Online’s sales tax features.
You can combine individual tax rates.