Set up and use sales tax in QuickBooks Online

Learn how to set up and use the sales tax feature in QuickBooks Online.

You can add the sales tax on your invoices and receipts for easy and accurate filings. QuickBooks, then, lets you know when your sales tax payment is due, so you can file on time and avoid extra fees.

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Note: Due to sales tax regulations, we recommend Quebec non-profit organizations consult with an accounting professional.

Here's how to set it all up and get started:

• Step 1: Learn how to calculate sales tax
• Step 2: Tell QuickBooks where you collect sales tax
• Step 3: Add sales tax categories to your products and services
• Step 4: Double-check your customers' info
• Step 5: Track sales tax from your customers
• Step 6: Check how much you owe and why
• Step 7: File your sales tax return

Step 1: Learn how to calculate sales tax

The total sales tax rate for each sale could be based on various factors like:

• Your customer's sales tax exempt status.
• Where you sell or where you ship.
• Your service or product's sales tax category.

Learn more on how QuickBooks makes each sales tax calculation accurate.

Step 2: Tell QuickBooks where you collect sales tax

QuickBooks keeps track of your province's sales tax laws to accurately calculate sales tax and returns. If you charge sales tax outside of your province, you can also add other tax agencies you pay.

If you just signed up to QuickBooks, set up where you charge sales tax for the first time. To set up sales tax, follow the steps below:

1. Go to Sales tax and select Set up sales tax.
   Note: In case you have payroll or any other taxes, go to Taxes, select Sales tax, then select Set up sales tax.
2. Select a Province or territory from the ▼ dropdown, then select Save.
3. Select Start of tax period and Filing frequency from the respective ▼ dropdowns.
4. Select your Reporting method (usually it'll be Accrual, but if in doubt, please consult your accountant).
5. Enter your GST/HST number (optional).
6. Select Next, then select OK.

Once you have set up the tax centre, you can also add custom sales tax rates.

Step 3: Add sales tax categories to your products and services

When you're ready, you can assign sales tax categories to anything you sell. This lets QuickBooks know how much sales tax you need to charge based on what exactly you're selling.

Step 4: Double-check your customers' info

The sales tax rates can also change if you ship products or perform services at your customer's address. And some customers are not required to pay sales tax, like churches, schools, or other non-profit organizations.

Make sure you have your customers' correct sales tax status, billing address, and shipping address. Here's how to double-check your customers' info in QuickBooks.

Step 5: Track sales tax from your customers

When you're done setting things up, you can start using the sales tax feature. We'll show you how it works and where you'll see it when you create an invoice or receipt for your customer.

Step 6: Check how much you owe and why

Get a detailed look at the sales tax you owe and why you owe it. This helps you make sure everything is accurate before you file and pay your sales tax return.

Learn how to run the Taxable Sales Summary report to view your ​sales tax info anytime.

Step 7: File your sales tax return

This is the final step in ensuring your sales tax is set up correctly, so you’re ready to file your sales tax return.

QuickBooks tracks your payment due dates in one place so you can avoid late returns and penalties. Once it’s time to file, review what you owe to make sure everything is accurate. After you file, you can track your new sales tax payment in QuickBooks to keep your records up to date.

Learn how to file your sales tax return and record your sales tax payment.