Set up and use sales tax in QuickBooks Online

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

QuickBooks can automatically do the sales tax calculations for you on your invoices and receipts for easy and accurate filings. Then, it lets you know when your tax payment is due, so you can file on time and avoid extra fees.

Note: Due to 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 QuickBooks calculates sales tax
• Step 2: Tell QuickBooks where you collect sales tax
• Step 3: Add 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 QuickBooks calculates sales tax

QuickBooks automatically calculates the total sales tax rate for each sale based on the following:

• Your customer's sales tax exempt status.
• Where you sell and 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 Online keeps track of your province's 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.

If you can't find the tax agency you need, it may be because you've already set up a tax agency for a province that collects GST. If you have, you won't see options for Alberta, Northwest Territories, Nunavut, or Yukon. These provinces collect only the GST, and each GST amount is accounted for in the tax agency you've already set up. Any relevant GST is filed with the tax agency you have already set up.

Step 3: Add 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, or where, you're selling.

Rules on how to tax a product can change depending on where you sell.

Step 4: Double-check your customers' info

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

Make sure you have your customers' correct 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 taxes you owe and why you owe them. This helps you make sure everything is accurate before you file and pay your sales tax return.

Learn how to run the GST/HST Detail report to view your sales tax info anytime.

Step 7: File your sales tax return

QuickBooks Online tracks your payment due dates in one place so you can avoid late returns and extra fees. Once it's time to file, review what you owe to make sure everything is accurate. Then, you can e-file on your tax agency's website or send your return by mail. 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 tax payment.