I have noticed a problem with how QB Online is calculating the taxable subtotal when including items that are both taxable and non-taxable and then adding a discount value "before" the tax calculation.
Here is an example:
Item 1: $299 (Taxable)
Item 2: $299 (Taxable)
Item 3: $39 (Non Taxable Service Fee)
Discount Value $200.
Taxable Subtotal should be either $437 (assuming it takes the $200 discount off the total of all 3 items) or $398 if it takes the $200 off the two taxable items ($299+$299 - $200=$398). However QB Online somehow calculates the taxable amount as $410.24???
Obviously this would make a huge difference to my Sales Tax payable account when I start adding all of the instances this has happened for each of my invoices.
Has anyone else seen this behavior or is there a known case that is opened on this?
I have included a screen capture of the example above for reference.
It's actually working correctly.
QB is pro-rating the discount across all of the invoice lines:
- 93.88% of the invoice total is taxable and 6.12% of the invoice is not taxable.
- So, the discount's impact on the taxable portion of the sale is a reduction in the taxable amount by 93.88% of the $200 discount, or a reduction of $187.76.
- So, the final taxable amount is $598 - $187.76 = $410.24