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Understand nontaxable sales in QuickBooks Online

SOLVEDby QuickBooks8Updated 2 weeks ago

Learn how to determine if your sale is exempt from tax in QuickBooks Online.

Learn about tax-exempt items

Generally, you're not required to collect sales tax for the following items:

  • Resold items: Retailers don't typically have to pay sales tax on wholesale purchases. It's assumed that the end consumer will pay sales tax on these items at the point of purchase.
  • Raw materials: If you produce and sell goods that will be used as raw material for other goods, these items are typically considered sales tax exempt.
  • Transactions with nonprofit organizations: Sales made to nonprofit organizations are normally exempt from sales tax. If you conduct business with tax-exempt organizations, you'll need to get a copy of the buyer's tax-exempt number or certificate issued by the province they’re in.
Note: Always check with your individual province tax authority as to which goods and services are subject to sales tax.

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