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Default customer sales tax rate in QuickBooks Online

by Intuit Updated 2 days ago

In QuickBooks Online, you can either mark each customer as taxable or not or mark all of them as taxable at a default rate. If they are marked as taxable, you can always choose which tax rate to apply to each customer, otherwise, they will be taxed at a default rate, if you haven’t set up a rate for each of them on the sales form yet.

Note: If you don't see these settings, you may be using Automated Sales Tax. See Set up and use Automated Sales Tax for more information.

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Mark a customer as taxable

  1. Go to Sales, then select Customers (Take me there).
  2. Select the name of a customer to expand their details.
  3. Select Edit at the top.
  4. In the Additional info section, choose a rate from the Sales tax rate dropdown.
    Note: If the customer is tax exempt, select the checkbox This customer is tax exempt.
  5. Select Save.

Set a default sales tax rate for all customers

  1. Go to Taxes, then select Sales tax (Take me there).
  2. In the Related Tasks section, select Edit sales tax settings.
  3. Select the Default sales tax dropdown to choose the tax you would like to appear as the default sales tax.
  4. You can also choose to Mark all new customers taxable and/or Mark all new products and services taxable.
  5. When you're done, select Save.

Your new default rate now shows up on all sales forms. However, if you want to charge a customer a different sales tax rate, use the Tax dropdown on the sales form to change the tax rate. If you've accidentally created invoices without sales tax in the past, you'll be able to edit those invoices to reflect the proper sales tax.

If you are unsure about which customers pay sales tax and at what percentage, run a report to see which customers are currently marked as taxable.

To run a taxable customer report:

  1. Go to Taxes, then select Sales tax (Take me there).
  2. In the Related Tasks section, select View taxable customer report.
  3. A report displays the customer's information, whether they are taxable or not, and at what rate. You can further customize this report if needed.

If you have users with limited access for either Customer and Sales (A/R--Accounts Receivable) or Vendors & Purchases (A/P--Accounts Payable), what they can do in the Sales Tax Center is also limited to the scope of their roles. See Sales tax in QuickBooks Online, for more resources.

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