I am trying to add a discount for services to an estimate (Ontario). For the tax should I select zero-rated, tax exempt or out of scope? What's the difference?

whitney-s-gibson · ‎January 27, 2024

I am based in Ontario. I provide marketing consulting services to my clients. The discount accounts for a friends and family rate. All of the above tax options show up as 0% but I'm not sure if the classification matters.

JamesM4 · ‎January 29, 2024

Hello whitney-s-gibson,

Welcome to the QuickBooks Community. It's good to know the difference among the tax codes you've mentioned above. I'll be happy to steer you on the right path by providing the information you need to move forward.

Zero-rated is a taxable sales code that has a rate of 0% in QuickBooks. Tax-exempt means there's no taxes applied and it's non-taxable. Out of scope pertains to non-taxable goods and services with a rate of 0% in QuickBooks. I recommend consulting with your accountant to learn more about the best tax code to use for your business. Otherwise, you're more than welcome to ask other questions below or reference the following article with more info about: Common sales tax codes.

Let me know if this info helps by leaving a comment below. I'll be a message away.

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I am trying to add a discount for services to an estimate (Ontario). For the tax should I select zero-rated, tax exempt or out of scope? What's the difference?

I am trying to add a discount for services to an estimate (Ontario). For the tax should I select zero-rated, tax exempt or out of scope? What's the difference?

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