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Sales Tax calculation is broken. Taxable Subtotal is not adding correctly.

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.

 

1 Comment
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BRC
Established Community Backer ***

Re: Sales Tax calculation is broken. Taxable Subtotal is not adding correctly.

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