Understand nontaxable sales in QuickBooks Online

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 tax for the following items:

• Resold items: Retailers don't typically have to pay tax on wholesale purchases. It's assumed that the end consumer will pay 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 tax exempt.
• Transactions with nonprofit organisations: Sales made to nonprofit organisations are normally exempt from tax. If you conduct business with tax-exempt organisations, you'll need to get a copy of the buyer's tax-exempt number or certificate.