Hello mbeke,
This is a great question and I want to make sure you have the options for how to handle no longer needing sales tax in your QuickBooks Online account to make sure that you don't have to go back and make corrections later.
@LeithG is correct: once sales tax is turned on, it cannot be turned off. This is to protect the integrity of your prior transactions and filings so your books continue to remain in balance. That being said, there are some settings you'll want to consider changing, which Lashedlifter touched on as well.
If you've set up customers, products, or accounts with a default sales tax code, it'll create less work in the future if you go back now and remove those defaults. For instance, on a customer profile, follow these steps.
- Hover over Sales in the left menu.
- Choose Customers.
- Click the name of the customer.
- Choose Edit.
- Go to the Tax info tab.
- Uncheck the Assign default tax code box.
- Click Save.
For products, services, and accounts in the chart of accounts, it'll mean choosing a zero-rate code to replace whatever default you had selected originally. Products and services can also be handled through the Sales area, while the chart of accounts is accessed via the Accounting tab, then you can click the down arrow beside an account to see the Edit option.
In addition to these steps, you can also change your sales tax in your settings to set a default. In this case, the zero-rated default you can choose is Out of scope. Here are the steps you can take to see if this meets your needs.
- Select the Gear icon.
- Choose Account and settings.
- Select Advanced.
- Click the Accounting section to edit it.
- Choose from the Default tax rate selection drop-down menu.
- Click Save.
Setting the default here will prevent you from needing to choose a zero-rate code each time you create a transaction. Note that you'll still want to change the specific settings on customers, accounts, and likewise however as those defaults would override the default set in the Settings.
Feel free to comment on this thread again if you have further questions! :)
